Ziff Davis, Inc. (NASDAQ: ZD) (“Ziff Davis” or “the Company”)
today reported unaudited financial results for the second quarter
ended June 30, 2023.
“We are cautiously optimistic about the second half of the year,
as we are seeing some positive trends in our businesses,” said
Vivek Shah, Chief Executive Officer of Ziff Davis. “We are
especially enthusiastic about our recently announced strategic
partnership with Xyla, which we believe will accelerate AI
enablement across our portfolio."
SECOND QUARTER 2023 RESULTS
- Q2 2023 quarterly revenues decreased 3.4% to $326.0 million
compared to $337.4 million for Q2 2022.
- Income from operations decreased 15.2% to $38.9 million
compared to $45.9 million for Q2 2022.
- Net income (loss) increased to $16.7 million compared to
$(46.4) million for Q2 2022 primarily due to losses on our
investment in Consensus Cloud Solutions, Inc. (“Consensus”) in Q2
2022 that did not recur.
- Net income (loss) per diluted share(2) increased to $0.36 in Q2
2023 compared to $(0.99) for Q2 2022.
- Adjusted EBITDA(1) for the quarter decreased 9.6% to $106.7
million compared to $118.0 million for Q2 2022.
- Adjusted net income(1) decreased 19.9% to $59.6 million
compared to $74.4 million for Q2 2022.
- Adjusted net income per diluted share(1)(2) (or “Adjusted
diluted EPS”) for the quarter decreased 19.6% to $1.27 compared to
$1.58 for Q2 2022.
- Net cash provided by operating activities was $39.7 million in
Q2 2023 compared to $76.0 million in Q2 2022. Free cash flow(1) was
$14.5 million in Q2 2023 compared to $52.6 million in Q2 2022.
- Ziff Davis ended the quarter with approximately $829.3 million
in cash, cash equivalents, and investments after deploying
approximately $62.7 million primarily related to share repurchases
and approximately $1.5 million during the quarter for current and
prior year acquisitions.
The following table reflects additional results for the three
and six months ended June 30, 2023 and 2022, respectively (in
millions, except per share amounts).
Three months ended June
30,
% Change
Six months ended June
30,
% Change
2023
2022
2023
2022
Revenues
Digital Media
$
252.8
$
258.4
(2.2
)%
$
487.0
$
493.0
(1.2
)%
Cybersecurity and Martech
$
73.2
$
79.0
(7.3
)%
$
146.2
$
159.4
(8.3
)%
Total revenue(3)
$
326.0
$
337.4
(3.4
)%
$
633.2
$
652.4
(3.0
)%
Income from operations
$
38.9
$
45.9
(15.2
)%
$
65.2
$
76.4
(14.7
)%
Operating income margin
11.9
%
13.6
%
(1.7
)%
10.3
%
11.7
%
(1.4
)%
Net income (loss)
$
16.7
$
(46.4
)
135.9
%
$
9.1
$
(21.9
)
141.6
%
Net income (loss) per diluted
share(2)
$
0.36
$
(0.99
)
136.4
%
$
0.19
$
(0.47
)
140.4
%
Adjusted EBITDA(1)
$
106.7
$
118.0
(9.6
)%
$
201.0
$
218.8
(8.1
)%
Adjusted EBITDA margin(1)
32.7
%
35.0
%
(2.3
)%
31.7
%
33.5
%
(1.8
)%
Adjusted net income(1)
$
59.6
$
74.4
(19.9
)%
$
111.3
$
132.4
(15.9
)%
Adjusted diluted EPS(1)(2)
$
1.27
$
1.58
(19.6
)%
$
2.37
$
2.81
(15.7
)%
Net cash provided by operating
activities
$
39.7
$
76.0
(47.8
)%
$
155.0
$
192.5
(19.5
)%
Free cash flow(1)
$
14.5
$
52.6
(72.4
)%
$
99.8
$
138.6
(28.0
)%
Notes:
(1)
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.
(2)
The estimated GAAP effective tax rates
were approximately 27.2% and (33.2)% for the three months ended
June 30, 2023 and 2022, respectively, and 23.7% and 12,760.8% for
the six months ended June 30, 2023 and 2022, respectively. The
estimated Adjusted effective tax rates were approximately 24.8% and
22.7% for the three months ended June 30, 2023 and 2022,
respectively, and 24.3% and 22.9% for the six months ended June 30,
2023 and 2022, respectively.
(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 2023 as
follows (in millions, except per share data):
2023 Range of
Estimates
Low
High
Revenue
$
1,350.0
$
1,408.0
Adjusted EBITDA
$
479.0
$
514.0
Adjusted diluted EPS*
$
6.02
$
6.54
______________________________________________________
*
Adjusted diluted EPS for 2023 excludes
share-based compensation ranging between $32 million and $34
million, 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 2023 will be
between 23.0% and 25.0%.
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.
Earnings Conference Call and Audio Webcast
Ziff Davis will host a live audio webcast and conference call
discussing its second quarter 2023 financial results on Friday,
August 4, 2023, at 8:30AM ET. The live webcast and call will be
accessible by phone by dialing (844) 985-2014 or via
www.ziffdavis.com. Following the event, the audio recording and
presentation materials will be archived and made available at
www.ziffdavis.com.
About Ziff Davis
Ziff Davis, Inc. (NASDAQ: ZD) is a vertically focused digital
media and internet company whose portfolio includes leading brands
in technology, shopping, gaming and entertainment, connectivity,
health, cybersecurity, and martech. For more information, visit
www.ziffdavis.com.
“Safe Harbor” Statement Under the Private Securities
Litigation Reform Act of 1995: Certain statements in this Press
Release are “forward-looking statements” within the meaning of The
Private Securities Litigation Reform Act of 1995, including those
contained in Vivek Shah’s quote and the “Ziff Davis Guidance”
section regarding the Company’s expected fiscal 2023 financial
performance. These forward-looking statements are based on
management’s current expectations or beliefs and are subject to
numerous assumptions, risks, and uncertainties that could cause
actual results to differ materially from those described in the
forward-looking statements. These factors and uncertainties
include, among other items: the Company’s ability to grow
advertising revenues, profitability, and cash flows, particularly
in light of an uncertain U.S. or worldwide economy, including the
possibility of economic downturn or recession; the Company’s
ability to make interest and debt payments; the Company’s ability
to identify, close, and successfully transition acquisitions;
subscriber growth and retention; 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
the 2022 Annual Report on Form 10-K filed by Ziff Davis on March 1,
2023, and the other reports filed by Ziff Davis from time-to-time
with the SEC, each of which is available at www.sec.gov. The
forward-looking statements provided in this press release,
including those contained in Vivek Shah’s quote and in the “Ziff
Davis Guidance” portion regarding the Company’s expected fiscal
2023 financial performance are based on limited information
available to the Company at this time, which is subject to change.
Although management’s expectations may change after the date of
this Press Release, the Company undertakes no obligation to revise
or update these statements.
ZIFF DAVIS, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED, IN
THOUSANDS)
June 30, 2023
December 31, 2022
ASSETS
Cash and cash equivalents
$
679,090
$
652,793
Short-term investments
35,816
58,421
Accounts receivable, net of allowances of
$7,511 and $6,868, respectively
285,909
304,739
Prepaid expenses and other current
assets
74,044
68,319
Total current assets
1,074,859
1,084,272
Long-term investments
114,356
127,871
Property and equipment, net of accumulated
amortization of $296,223 and $255,586, respectively
192,380
178,184
Intangible assets, net
401,639
462,815
Goodwill
1,599,896
1,591,474
Deferred income taxes
8,561
8,523
Other assets
77,598
80,131
TOTAL ASSETS
$
3,469,289
$
3,533,270
LIABILITIES AND STOCKHOLDERS’
EQUITY
Accounts payable
$
127,145
$
120,829
Accrued employee related costs
33,659
42,178
Other accrued liabilities
52,702
39,539
Income taxes payable, current
11,052
19,712
Deferred revenue, current
188,725
187,904
Accrued liabilities and other current
liabilities
22,760
22,286
Total current liabilities
436,043
432,448
Long-term debt
1,000,178
999,053
Deferred revenue, noncurrent
8,303
9,103
Deferred income taxes
58,198
79,007
Income taxes payable, noncurrent
8,486
11,675
Other long-term liabilities
95,399
109,373
TOTAL LIABILITIES
1,606,607
1,640,659
Common stock
464
473
Additional paid-in capital
448,920
439,681
Retained earnings
1,492,879
1,537,830
Accumulated other comprehensive loss
(79,581
)
(85,373
)
TOTAL STOCKHOLDERS’ EQUITY
1,862,682
1,892,611
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
3,469,289
$
3,533,270
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,
2023
2022
2023
2022
Total revenues
$
326,016
$
337,356
$
633,158
$
652,424
Operating costs and expenses:
Cost of revenues
47,421
46,004
93,151
92,104
Sales and marketing
119,934
123,777
235,854
241,539
Research, development, and engineering
17,817
19,721
35,731
38,148
General and administrative
101,949
101,967
203,212
204,184
Total operating costs and expenses
287,121
291,469
567,948
575,975
Income from operations
38,895
45,887
65,210
76,449
Interest expense, net
(10,483
)
(9,569
)
(14,963
)
(19,859
)
Gain on debt extinguishment, net
—
2,613
—
1,393
(Loss) gain on investments, net
—
(48,243
)
357
(48,243
)
Unrealized loss on short-term investments
held at the reporting date, net
(3,196
)
(27,317
)
(23,541
)
(18,366
)
Other (loss) income, net
(1,503
)
6,345
(2,411
)
8,744
Income (loss) before income taxes and loss
from equity method investment, net
23,713
(30,284
)
24,652
118
Income tax expense
(6,461
)
(10,051
)
(5,845
)
(15,131
)
Loss from equity method investment,
net
(573
)
(6,101
)
(9,755
)
(6,886
)
Net income (loss)
$
16,679
$
(46,436
)
$
9,052
$
(21,899
)
Basic
$
0.36
$
(0.99
)
$
0.19
$
(0.47
)
Diluted
$
0.36
$
(0.99
)
$
0.19
$
(0.47
)
Weighted average shares outstanding:
Basic
46,798,800
46,978,709
46,892,504
47,016,351
Diluted
46,798,800
46,978,709
46,892,504
47,016,351
ZIFF DAVIS, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
Six months ended June
30,
2023
2022
Cash flows from operating activities:
Net income (loss)
$
9,052
$
(21,899
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
111,479
118,943
Non-cash operating lease costs
5,924
5,913
Share-based compensation
17,619
14,420
Provision for credit losses (benefit) on
accounts receivable
1,819
(1,376
)
Deferred income taxes, net
(18,330
)
(10,266
)
Gain on extinguishment of debt, net
—
(1,393
)
Loss from equity method investments
9,755
6,886
Unrealized loss on short-term investments
held at the reporting date
23,541
18,366
(Gain) loss on investment, net
(357
)
48,243
Other
3,834
2,106
Decrease (increase) in:
Accounts receivable
20,470
77,168
Prepaid expenses and other current
assets
(13,038
)
5,804
Other assets
(4,030
)
(4,990
)
Increase (decrease) in:
Accounts payable
(1,332
)
(36,504
)
Deferred revenue
(1,777
)
(11,882
)
Accrued liabilities and other current
liabilities
(9,594
)
(17,055
)
Total operating cash provided by
continuing operations
155,035
192,484
Cash flows from investing activities:
Purchases of property and equipment
(55,250
)
(53,876
)
Acquisition of businesses, net of cash
received
(9,492
)
(92,425
)
Investment in available-for-sale
securities
—
(15,000
)
Proceeds from sale of equity
investments
3,174
—
Other
(3,753
)
—
Net cash used in investing activities
(65,321
)
(161,301
)
Cash flows from financing activities:
Payment of debt
—
(72,853
)
Proceeds from term loan
—
89,991
Debt extinguishment costs
—
(756
)
Repurchase of common stock
(62,678
)
(76,345
)
Issuance of common stock under employee
stock purchase plan
4,724
5,235
Proceeds from exercise of stock
options
—
148
Deferred payments for acquisitions
(6,679
)
(7,094
)
Other
21
(5
)
Net cash (used in) provided by financing
activities
(64,612
)
(61,679
)
Effect of exchange rate changes on cash
and cash equivalents
1,195
(16,056
)
Net change in cash and cash
equivalents
26,297
(46,552
)
Cash and cash equivalents at beginning of
year
652,793
694,842
Cash and cash equivalents at end of
year
$
679,090
$
648,290
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 and (2) they are used by our institutional
investors and the analyst community to help them analyze the health
of our business.
These non-GAAP financial measures are not measures presented in
accordance with GAAP, and our use of these terms may vary from that
of other companies. 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. Excluding these items from the non-GAAP measures facilitates
comparisons to historical operating results and comparisons to
peers, many of which exclude similar items. We believe that
non-GAAP financial measures excluding these items provide
meaningful supplemental information regarding operational
performance. We further believe these measures are useful to
investors in that they allow for greater transparency of certain
line items in the Company’s financial statements.
Adjusted EBITDA is defined as Net income (loss) with
adjustments to reflect the addition or elimination of certain items
including:
- Interest expense, net;
- (Gain) loss on debt extinguishment, net;
- (Gain) loss on sale of business;
- Unrealized (gain) loss on short-term investments held at the
reporting date, including the unrealized (gain) loss on our
investment in Consensus;
- (Gain) loss on investments, net;
- Other (income) expense, net;
- Income tax (benefit) expense;
- (Income) loss from equity method investments, net;
- Depreciation and amortization;
- Share-based compensation;
- Acquisition, integration, and other costs, including
adjustments to contingent consideration, lease terminations,
retention bonuses, other acquisition-specific items, and other
costs, such as severance and legal settlements;
- Disposal related costs associated with disposal of certain
businesses;
- Lease asset impairments and other charges; and
- Goodwill impairment on business.
Adjusted EBITDA margin is calculated by dividing Adjusted
EBITDA by Revenue.
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 costs related to 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 1.75% Convertible Notes in each period
presented;
- (Gain) loss on debt extinguishment, net;
- (Gain) loss on sale of business;
- Unrealized (gain) loss on short-term investments held at the
reporting date, including the unrealized (gain) loss on our
investment in Consensus;
- (Gain) loss on investments, net;
- (Income) loss from equity method investments, net;
- Amortization of patents and intangible assets that we
acquired;
- Goodwill impairment on business;
- Share-based compensation;
- Acquisition, integration and other costs, including adjustments
to contingent consideration, lease terminations, retention bonuses,
other acquisition-specific items, and other costs, such as
severance and legal settlements;
- Disposal related costs associated with disposal of certain
businesses;
- Lease asset impairments and other charges; and
- Dilutive effect of the convertible debt.
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 that excludes
the effect of convertible debt dilution.
Free cash flow is defined as Net cash provided by
operating activities, less purchases of property and equipment,
plus changes in contingent consideration.
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 (loss) to Adjusted EBITDA:
Three months ended June
30,
Six months ended June
30,
2023
2022
2023
2022
Net income (loss)
$
16,679
$
(46,436
)
$
9,052
$
(21,899
)
Interest expense, net
10,483
9,569
14,963
19,859
Gain on debt extinguishment, net
—
(2,613
)
—
(1,393
)
Unrealized loss on short-term investments
held at the reporting date
3,196
27,317
23,541
18,366
Loss (gain) on investments, net
—
48,243
(357
)
48,243
Other loss (income), net
1,503
(6,345
)
2,411
(8,744
)
Income tax expense
6,461
10,051
5,845
15,131
(Gain) loss from equity method investment,
net
(927
)
6,101
8,255
6,886
Depreciation and amortization
56,856
59,872
111,479
118,943
Share-based compensation
9,217
7,703
17,619
14,420
Acquisition, integration, and other
costs
3,369
3,431
6,894
4,965
Disposal related costs
60
65
209
1,304
Lease asset impairments and other
charges
(221
)
1,079
1,098
2,744
Adjusted EBITDA
$
106,676
$
118,037
$
201,009
$
218,825
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,
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
7
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
Three months ended June 30,
2022
Digital Media
Cybersecurity and
Martech
Corporate
Total
Revenues
$
258,343
$
79,013
$
—
$
337,356
Income (loss) from operations
$
44,162
$
13,023
$
(11,298
)
$
45,887
Depreciation and amortization
47,545
12,263
64
59,872
Share-based compensation
3,306
1,389
3,008
7,703
Acquisition, integration, and other
costs
3,183
239
9
3,431
Disposal related costs
—
—
65
65
Lease asset impairments and other
charges
637
442
—
1,079
Adjusted EBITDA
$
98,833
$
27,356
$
(8,152
)
$
118,037
______________________________________________________ Tables above
exclude certain intercompany allocations.
ZIFF DAVIS, INC. AND
SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The following table sets forth a
reconciliation of Net income (loss) to Adjusted net income with
adjustments presented on after-tax basis:
Three months ended June
30,
2023
Per diluted share*
2022
Per diluted share*
Net income (loss)
$
16,679
$
0.36
$
(46,436
)
$
(0.99
)
Interest costs
5,509
0.12
83
—
Gain on debt extinguishment, net
—
—
(2,309
)
(0.05
)
(Gain) loss on sale of business
88
—
—
—
Unrealized (gain) loss on short-term
investments held at the reporting date
2,416
0.05
26,273
0.56
(Gain) loss on investments, net
—
—
48,111
1.02
Loss (income) from equity method
investment, net
(552
)
(0.01
)
6,101
0.13
Amortization
25,796
0.55
32,064
0.68
Share-based compensation
7,181
0.15
6,798
0.14
Acquisition, integration, and other
costs
2,576
0.05
2,626
0.06
Disposal related costs
44
—
305
0.01
Lease asset impairments and other
charges
(160
)
—
808
0.02
Adjusted net income
$
59,577
$
1.27
$
74,424
$
1.58
Six months ended June
30,
2023
Per diluted share*
2022
Per diluted share*
Net income (loss)
$
9,052
$
0.19
$
(21,899
)
$
(0.47
)
Interest costs
5,565
0.12
173
—
Gain on debt extinguishment, net
—
—
(1,393
)
(0.03
)
(Gain) loss on sale of business
88
—
—
—
Unrealized (gain) loss on short-term
investments held at the reporting date
17,681
0.38
17,322
0.37
(Gain) loss on investments, net
(268
)
(0.01
)
48,111
1.01
Loss (income) from equity method
investment, net
8,630
0.18
6,886
0.15
Amortization
50,418
1.08
64,462
1.37
Share-based compensation
13,998
0.30
11,676
0.25
Acquisition, integration, and other
costs
5,153
0.11
3,826
0.08
Disposal related costs
156
—
1,123
0.03
Lease asset impairment and other
charges
830
0.02
2,066
0.05
Adjusted net income
$
111,303
$
2.37
$
132,353
$
2.81
______________________________________________________ * The
reconciliation of Net (loss) income per diluted share to Adjusted
net income per diluted share may not foot since each is calculated
independently.
ZIFF DAVIS, INC. AND
SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN THOUSANDS)
The following are the adjustments to
certain statement of operations items 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.
Three months ended June 30,
2023
GAAP amount
Adjustments
Adjusted non-GAAP
amount
Interest costs, net
(Gain) loss on sale of
business
Unrealized (gain) loss on
short-term investments held at the reporting date
(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
Cost of revenues
$
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 and administrative
$
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
$
(3,196
)
—
—
3,196
—
—
—
—
—
—
—
$
—
Other loss, net
$
(1,503
)
—
118
—
—
—
—
—
—
—
—
$
(1,385
)
Income tax expense
$
(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
)
ZIFF DAVIS, INC. AND
SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN THOUSANDS)
Three months ended June 30,
2022
GAAP amount
Adjustments
Adjusted non-GAAP
amount
Interest costs, net
(Gain) loss on debt
extinguishment
Unrealized (gain) loss on
short-term investments held at the reporting date
(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
Cost of revenues
$
46,004
$
—
$
—
$
—
$
—
$
—
$
(259
)
$
(142
)
$
(2
)
$
—
$
—
$
45,601
Sales and marketing
$
123,777
—
—
—
—
—
—
(1,106
)
(1,219
)
—
(438
)
$
121,014
Research, development, and engineering
$
19,721
—
—
—
—
—
—
(851
)
(195
)
—
—
$
18,675
General and administrative
$
101,967
—
—
—
—
—
(41,642
)
(5,604
)
(2,015
)
(64
)
(641
)
$
52,001
Interest expense, net
$
(9,569
)
110
—
—
—
—
—
—
—
—
—
$
(9,459
)
Gain on debt extinguishment, net
$
2,613
—
(3,069
)
—
—
—
—
—
—
—
—
$
(456
)
Loss on investment, net
$
(48,243
)
—
—
—
48,243
—
—
—
—
—
—
$
—
Unrealized loss on short-term investments
held at period end
$
(27,317
)
—
—
27,317
—
—
—
—
—
—
—
$
—
Other income, net
$
6,345
—
—
—
(174
)
—
—
—
—
—
—
$
6,171
Income tax expense
$
(10,051
)
(27
)
760
(1,044
)
42
—
(9,837
)
(905
)
(805
)
241
(271
)
$
(21,897
)
Loss from equity method investment,
net
$
(6,101
)
—
—
—
—
6,101
—
—
—
—
—
$
—
Total non-GAAP adjustments
$
83
$
(2,309
)
$
26,273
$
48,111
$
6,101
$
32,064
$
6,798
$
2,626
$
305
$
808
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 sale of
business
Unrealized (gain) loss on
short-term investments held at the reporting date
(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
Cost of revenues
$
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 and administrative
$
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 (loss) on debt extinguishment,
net
$
—
—
—
—
—
—
—
—
—
—
—
$
—
Gain on sale of business
$
—
—
—
—
—
—
—
—
—
—
—
$
—
Gain on investment, net
$
357
—
—
—
(357
)
—
—
—
—
—
—
$
—
Unrealized loss on short-term investments
held at period end
$
(23,541
)
—
—
23,541
—
—
—
—
—
—
—
$
—
Other loss, net
$
(2,411
)
—
118
—
—
—
—
—
—
—
—
$
(2,293
)
Income tax expense
$
(5,845
)
(1,855
)
(30
)
(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
$
88
$
17,681
$
(268
)
$
8,630
$
50,418
$
13,998
$
5,153
$
156
$
830
ZIFF DAVIS, INC. AND
SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN THOUSANDS)
Six months ended June 30,
2022
GAAP amount
Adjustments
Adjusted amount
Interest costs
(Gain) loss on debt
extinguishment
Unrealized (gain) loss on
short-term investments held at the reporting date
(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
Cost of revenues
$
92,104
$
—
$
—
$
—
$
—
$
—
$
(538
)
$
(226
)
$
(54
)
$
—
$
—
$
91,286
Sales and marketing
$
241,539
—
—
—
—
—
—
(1,675
)
(1,385
)
—
(961
)
$
237,518
Research, development, and engineering
$
38,148
—
—
—
—
—
—
(1,480
)
(413
)
—
—
$
36,255
General and administrative
$
204,184
—
—
—
—
—
(82,865
)
(11,039
)
(3,113
)
(1,304
)
(1,783
)
$
104,080
Interest expense, net
$
(19,859
)
231
—
—
—
—
—
—
—
—
—
$
(19,628
)
Gain on debt extinguishment, net
$
1,393
—
(1,849
)
—
—
—
—
—
—
—
—
$
(456
)
Loss on investment, net
$
(48,243
)
—
—
—
48,243
—
—
—
—
—
—
$
—
Unrealized loss on short-term investments
held at period end
$
(18,366
)
—
—
18,366
—
—
—
—
—
—
—
$
—
Other income, net
$
8,744
—
—
—
(174
)
—
—
—
—
—
—
$
8,570
Income tax expense
$
(15,131
)
(58
)
456
(1,044
)
42
—
(18,941
)
(2,744
)
(1,139
)
(181
)
(678
)
$
(39,418
)
Loss from equity method investment,
net
$
(6,886
)
—
—
—
—
6,886
—
—
—
—
—
$
—
Total non-GAAP adjustments
$
173
$
(1,393
)
$
17,322
$
48,111
$
6,886
$
64,462
$
11,676
$
3,826
$
1,123
$
2,066
ZIFF DAVIS, INC. AND
SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN THOUSANDS)
The following tables set forth a
reconciliation of Net cash provided by operating activities to Free
cash flow:
2023
Q1
Q2
Q3
Q4
YTD
Net cash provided by operating
activities
$
115,307
$
39,728
$
—
$
—
$
155,035
Less: Purchases of property and
equipment
(30,017
)
(25,233
)
—
—
(55,250
)
Free cash flow
$
85,290
$
14,495
$
—
$
—
$
99,785
2022
Q1
Q2
Q3
Q4
YTD
Net cash provided by operating
activities
$
116,511
$
75,973
$
100,735
$
43,225
$
336,444
Less: Purchases of property and
equipment
(30,502
)
(23,374
)
(26,891
)
(25,387
)
(106,154
)
Free cash flow
$
86,009
$
52,599
$
73,844
$
17,838
$
230,290
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230803997576/en/
Alan Steier Investor Relations Ziff Davis, Inc.
investor@ziffdavis.com
Rebecca Wright Corporate Communications Ziff Davis, Inc.
press@ziffdavis.com
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