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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Ziff Davis Inc | NASDAQ:ZD | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.30 | 0.62% | 48.93 | 48.46 | 49.39 | 49.90 | 48.60 | 49.46 | 288,604 | 01:00:00 |
Ziff Davis, Inc. (NASDAQ: ZD) (“Ziff Davis” or “the Company”) today reported unaudited financial results for the third quarter ended September 30, 2023.
“Given the marked improvement in the third quarter with our Digital Media segment returning to positive organic growth, we believe we’re turning the corner,” said Vivek Shah, Chief Executive Officer of Ziff Davis. “We’re also making solid progress on AI enablement across our portfolio."
THIRD QUARTER 2023 RESULTS
The following table reflects results for the three and nine months ended September 30, 2023 and 2022, respectively (in millions, except per share amounts).
Three months ended September 30,
% Change
Nine months ended September 30,
% Change
2023
2022
2023
2022
Revenues
Digital Media
$267.9
$263.7
1.6%
$754.9
$756.7
(0.2)%
Cybersecurity and Martech
$73.1
$78.2
(6.5)%
$219.2
$237.6
(7.7)%
Total revenues(3)
$341.0
$341.9
(0.3)%
$974.1
$994.3
(2.0)%
(Loss) income from operations
$(13.3)
$29.0
(145.9)%
$51.9
$105.5
(50.8)%
Operating (loss) income margin
(3.9)%
8.5%
(12.4)%
5.3%
10.6%
(5.3)%
Net (loss) income
$(31.0)
$18.2
(270.3)%
$(21.9)
$(3.7)
(491.9)%
Net (loss) income per diluted share(1)
$(0.67)
$0.39
(271.8)%
$(0.47)
$(0.08)
(487.5)%
Adjusted EBITDA(2)
$113.7
$120.1
(5.3)%
$314.7
$338.9
(7.1)%
Adjusted EBITDA margin(2)
33.3%
35.1%
(1.8)%
32.3%
34.1%
(1.8)%
Adjusted net income(2)
$69.1
$74.3
(7.0)%
$180.4
$206.6
(12.7)%
Adjusted diluted EPS(1)(2)
$1.50
$1.58
(5.1)%
$3.86
$4.41
(12.5)%
Net cash provided by operating activities
$72.8
$100.7
(27.7)%
$227.8
$293.2
(22.3)%
Free cash flow(2)
$45.6
$73.8
(38.2)%
$145.4
$212.5
(31.6)%
Notes:
(1)
GAAP effective tax rates were approximately (20.7)% and 45.9% for the three months ended September 30, 2023 and 2022, respectively, and (1,040.8)% and 83.9% for the nine months ended September 30, 2023 and 2022, respectively. Adjusted effective tax rates were approximately 22.9% and 22.6% for the three months ended September 30, 2023 and 2022, respectively, and 23.8% and 22.8% for the nine months ended September 30, 2023 and 2022, respectively.
(2)
For definitions of non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures refer to section “Non-GAAP Financial Measures,” further in this report.
(3)
The revenues associated with each of the businesses may not foot precisely since each is presented independently.
ZIFF DAVIS GUIDANCE
The Company 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 third quarter 2023 financial results on Thursday, November 9, 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)
September 30, 2023
December 31, 2022
ASSETS
Cash and cash equivalents
$
660,624
$
652,793
Short-term investments
29,797
58,421
Accounts receivable, net of allowances of $7,388 and $6,868, respectively
291,485
304,739
Prepaid expenses and other current assets
81,757
68,319
Total current assets
1,063,663
1,084,272
Long-term investments
140,167
127,871
Property and equipment, net of accumulated amortization of $308,368 and $255,586, respectively
186,165
178,184
Intangible assets, net
367,943
462,815
Goodwill
1,539,663
1,591,474
Deferred income taxes
8,573
8,523
Other assets
77,053
80,131
TOTAL ASSETS
$
3,383,227
$
3,533,270
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable
$
127,818
$
120,829
Accrued employee related costs
37,011
42,178
Other accrued liabilities
47,219
39,539
Income taxes payable, current
4,985
19,712
Deferred revenue, current
182,741
187,904
Accrued liabilities and other current liabilities
19,724
22,286
Total current liabilities
419,498
432,448
Long-term debt
1,000,743
999,053
Deferred revenue, noncurrent
8,000
9,103
Deferred income taxes
51,098
79,007
Income taxes payable, noncurrent
8,486
11,675
Other long-term liabilities
91,264
109,373
TOTAL LIABILITIES
1,579,089
1,640,659
Common stock
460
473
Additional paid-in capital
462,812
439,681
Retained earnings
1,426,979
1,537,830
Accumulated other comprehensive loss
(86,113
)
(85,373
)
TOTAL STOCKHOLDERS’ EQUITY
1,804,138
1,892,611
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
3,383,227
$
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 September 30,
Nine months ended September 30,
2023
2022
2023
2022
Total revenues
$
340,985
$
341,873
$
974,143
$
994,297
Operating costs and expenses:
Cost of revenues
55,526
52,603
148,677
144,707
Sales and marketing
125,062
119,474
360,916
361,013
Research, development, and engineering
17,597
17,735
53,328
55,883
General and administrative
99,269
95,658
302,481
299,842
Goodwill impairment on business
56,850
27,369
56,850
27,369
Total operating costs and expenses
354,304
312,839
922,252
888,814
(Loss) income from operations
(13,319
)
29,034
51,891
105,483
Interest expense, net
(2,817
)
(8,560
)
(17,780
)
(28,419
)
Gain on debt extinguishment, net
—
10,112
—
11,505
Gain (loss) on investments, net
—
471
357
(47,772
)
Unrealized (loss) gain on short-term investments held at the reporting date, net
(6,019
)
4,201
(29,560
)
(14,165
)
Other (loss) income, net
(3,571
)
4,218
(5,982
)
12,962
(Loss) income before income taxes and income (loss) from equity method investment, net
(25,726
)
39,476
(1,074
)
39,594
Income tax expense
(5,335
)
(18,100
)
(11,180
)
(33,231
)
Income (loss) from equity method investment, net
90
(3,191
)
(9,665
)
(10,077
)
Net (loss) income
$
(30,971
)
$
18,185
$
(21,919
)
$
(3,714
)
Basic
$
(0.67
)
$
0.39
$
(0.47
)
$
(0.08
)
Diluted
$
(0.67
)
$
0.39
$
(0.47
)
$
(0.08
)
Weighted average shares outstanding:
Basic
46,062,097
46,871,897
46,612,660
46,967,671
Diluted
46,062,097
46,871,897
46,612,660
46,967,671
ZIFF DAVIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
Nine months ended September 30,
2023
2022
Cash flows from operating activities:
Net loss
$
(21,919
)
$
(3,714
)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
167,333
174,880
Non-cash operating lease costs
7,248
9,043
Share-based compensation
24,393
20,806
Provision for credit losses (benefit) on accounts receivable
2,296
(1,142
)
Deferred income taxes, net
(25,658
)
(13,552
)
Gain on extinguishment of debt, net
—
(11,505
)
Goodwill impairment on business
56,850
27,369
Changes in fair value of contingent consideration
—
(2,305
)
Loss from equity method investments
9,665
10,077
Unrealized loss on short-term investments held at the reporting date
29,560
14,165
(Gain) loss on investment, net
(357
)
47,772
Other
5,113
2,320
Decrease (increase) in:
Accounts receivable
11,043
85,121
Prepaid expenses and other current assets
(10,059
)
3,177
Other assets
(7,961
)
(8,667
)
Increase (decrease) in:
Accounts payable
1,955
(11,445
)
Deferred revenue
(6,820
)
(25,400
)
Accrued liabilities and other current liabilities
(14,839
)
(23,781
)
Net cash provided by operating activities
227,843
293,219
Cash flows from investing activities:
Purchases of property and equipment
(82,476
)
(80,767
)
Acquisition of businesses, net of cash received
(9,492
)
(104,094
)
Investment in available-for-sale securities
—
(15,000
)
Purchases of equity investments
(11,790
)
—
Proceeds from sale of equity investments
3,174
—
Other
(4,154
)
—
Net cash used in investing activities
(104,738
)
(199,861
)
Cash flows from financing activities:
Payment of debt
—
(166,904
)
Proceeds from term loan
—
112,286
Debt extinguishment costs
—
(756
)
Repurchase of common stock
(107,341
)
(76,545
)
Issuance of common stock under employee stock purchase plan
4,725
5,235
Proceeds from exercise of stock options
—
148
Deferred payments for acquisitions
(14,141
)
(14,734
)
Other
(53
)
(559
)
Net cash used in financing activities
(116,810
)
(141,829
)
Effect of exchange rate changes on cash and cash equivalents
1,536
(24,454
)
Net change in cash and cash equivalents
7,831
(72,925
)
Cash and cash equivalents at beginning of year
652,793
694,842
Cash and cash equivalents at end of year
$
660,624
$
621,917
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:
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:
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 (loss) income to Adjusted EBITDA:
Three months ended September 30,
Nine months ended September 30,
2023
2022
2023
2022
Net (loss) income
$
(30,971
)
$
18,185
$
(21,919
)
$
(3,714
)
Interest expense, net
2,817
8,560
17,780
28,419
Gain on debt extinguishment, net
—
(10,112
)
—
(11,505
)
Unrealized loss (gain) on short-term investments held at the reporting date
6,019
(4,201
)
29,560
14,165
(Gain) loss on investments, net
—
(471
)
(357
)
47,772
Other loss (income), net
3,571
(4,218
)
5,982
(12,962
)
Income tax expense
5,335
18,100
11,180
33,231
(Income) loss from equity method investment, net
(90
)
3,191
8,165
10,077
Depreciation and amortization
55,854
55,937
167,333
174,880
Share-based compensation
6,774
6,386
24,393
20,806
Acquisition, integration, and other costs
4,457
2,708
11,351
7,673
Disposal related costs
1,633
24
1,842
1,328
Lease asset impairments and other charges
1,485
(1,344
)
2,583
1,400
Goodwill impairment on business
56,850
27,369
56,850
27,369
Adjusted EBITDA
$
113,734
$
120,114
$
314,743
$
338,939
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, 2023
Digital Media
Cybersecurity and Martech
Corporate
Total
Revenues
$
267,934
$
73,051
$
—
$
340,985
(Loss) income from operations
$
(12,922
)
$
12,527
$
(12,924
)
$
(13,319
)
Depreciation and amortization
44,907
10,941
6
55,854
Share-based compensation
2,579
399
3,796
6,774
Acquisition, integration, and other costs
4,138
263
56
4,457
Disposal related costs
452
203
978
1,633
Lease asset impairments and other charges
1,379
106
—
1,485
Goodwill impairment on a business
56,850
—
—
56,850
Adjusted EBITDA
$
97,383
$
24,439
$
(8,088
)
$
113,734
Three months ended September 30, 2022
Digital Media
Cybersecurity and Martech
Corporate
Total
Revenues
$
263,683
$
78,190
$
—
$
341,873
Income (loss) from operations
$
27,106
$
14,038
$
(12,110
)
$
29,034
Depreciation and amortization
44,631
11,445
(139
)
55,937
Share-based compensation
2,471
1,086
2,829
6,386
Acquisition, integration, and other costs
1,989
344
375
2,708
Disposal related costs
—
—
24
24
Lease asset impairments and other charges
(1,233
)
(111
)
—
(1,344
)
Goodwill impairment on a business
27,369
—
—
27,369
Adjusted EBITDA
$
102,333
$
26,802
$
(9,021
)
$
120,114
______________________________________________________
Figures above are net of intercompany costs and revenues.
ZIFF DAVIS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The following table sets forth a reconciliation of Net (loss) income to Adjusted net income with adjustments presented on after-tax basis:
Three months ended September 30,
2023
Per diluted share*
2022
Per diluted share*
Net (loss) income
$
(30,971
)
$
(0.67
)
$
18,185
$
0.39
Interest costs
336
0.01
81
—
Gain on debt extinguishment, net
—
—
(7,701
)
(0.16
)
Loss on sale of business
3,433
0.07
—
—
Unrealized loss on short-term investments held at the reporting date
4,465
0.10
8,191
0.17
Gain on investments, net
—
—
(812
)
(0.02
)
(Income) loss from equity method investment, net
(90
)
—
3,191
0.07
Amortization
25,070
0.55
26,012
0.55
Share-based compensation
6,813
0.15
5,489
0.12
Acquisition, integration, and other costs
1,334
0.03
2,051
0.04
Disposal related costs
1,144
0.02
(69
)
—
Lease asset impairments and other charges
689
0.01
(985
)
(0.02
)
Goodwill impairment on business
56,850
1.23
20,636
0.44
Adjusted net income
$
69,073
$
1.50
$
74,269
$
1.58
Nine months ended September 30,
2023
Per diluted share*
2022
Per diluted share*
Net loss
$
(21,919
)
$
(0.47
)
$
(3,714
)
$
(0.08
)
Interest costs
5,901
0.13
254
0.01
Gain on debt extinguishment, net
—
—
(9,094
)
(0.19
)
Loss on sale of business
3,521
0.08
—
—
Unrealized loss on short-term investments held at the reporting date
22,146
0.47
25,513
0.54
(Gain) loss on investments, net
(268
)
(0.01
)
47,299
1.01
Loss from equity method investment, net
8,540
0.18
10,077
0.21
Amortization
75,488
1.62
90,474
1.93
Share-based compensation
20,811
0.44
17,165
0.37
Acquisition, integration, and other costs
6,487
0.14
5,877
0.13
Disposal related costs
1,300
0.03
1,054
0.02
Lease asset impairment and other charges
1,519
0.03
1,081
0.02
Goodwill impairment on business
56,850
1.22
20,636
0.44
Adjusted net income
$
180,376
$
3.86
$
206,622
$
4.41
______________________________________________________
* 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 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, 2023
GAAP amount
Adjustments
Adjusted non-GAAP amount
Interest costs, net
(Gain) loss on debt extinguishment
(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
Goodwill impairment of business
Cost of revenues
$
(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 and administrative
$
(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
)
Unrealized loss on short-term investments held at period end
$
(6,019
)
—
—
—
6,019
—
—
—
—
—
—
—
—
$
—
Other (loss) income, net
$
(3,571
)
—
—
5,115
—
—
—
—
—
—
—
—
—
$
1,544
Income tax expense
$
(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
ZIFF DAVIS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN THOUSANDS)
Three months ended September 30, 2022
GAAP amount
Adjustments
Adjusted non-GAAP amount
Interest costs, net
(Gain) loss on debt extinguishment
(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
Goodwill impairment of business
Cost of revenues
$
(52,603
)
$
—
$
—
$
—
$
—
$
—
$
—
$
242
$
63
$
65
$
—
$
—
$
—
$
(52,233
)
Sales and marketing
$
(119,474
)
—
—
—
—
—
—
—
772
1,083
—
(962
)
—
$
(118,581
)
Research, development, and engineering
$
(17,735
)
—
—
—
—
—
—
—
568
258
—
—
—
$
(16,909
)
General and administrative
$
(95,658
)
—
—
—
—
—
—
36,415
4,983
1,302
24
(382
)
—
$
(53,316
)
Goodwill impairment on business
$
(27,369
)
—
—
—
—
—
—
—
—
—
—
—
27,369
$
—
Interest expense, net
$
(8,560
)
106
—
—
—
—
—
—
—
—
—
—
—
$
(8,454
)
Gain on debt extinguishment, net
$
10,112
—
(10,211
)
—
—
—
—
—
—
—
—
—
—
$
(99
)
Gain on investment, net
$
471
—
—
—
—
(471
)
—
—
—
—
—
—
—
$
—
Unrealized gain on short-term investments held at period end
$
4,201
—
—
—
(4,201
)
—
—
—
—
—
—
—
—
$
—
Other income, net
$
4,218
—
—
—
—
(450
)
—
—
—
—
(111
)
—
—
$
3,657
Income tax expense
$
(18,100
)
(25
)
2,510
—
12,392
109
—
(10,645
)
(897
)
(657
)
18
359
(6,733
)
$
(21,669
)
Loss from equity method investment, net
$
(3,191
)
—
—
—
—
—
3,191
—
—
—
—
—
—
$
—
Total non-GAAP adjustments
$
81
$
(7,701
)
$
—
$
8,191
$
(812
)
$
3,191
$
26,012
$
5,489
$
2,051
$
(69
)
$
(985
)
$
20,636
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 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
Goodwill impairment of business
Cost of revenues
$
(148,677
)
$
—
$
—
$
—
$
—
$
—
$
543
$
246
$
191
$
—
$
—
$
—
$
(147,697
)
Sales and marketing
$
(360,916
)
—
—
—
—
—
—
2,285
3,128
4
—
—
$
(355,499
)
Research, development, and engineering
$
(53,328
)
—
—
—
—
—
—
2,581
535
3
—
—
$
(50,209
)
General and administrative
$
(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
)
Gain on investment, net
$
357
—
—
—
(357
)
—
—
—
—
—
—
—
$
—
Unrealized loss on short-term investments held at period end
$
(29,560
)
—
—
29,560
—
—
—
—
—
—
—
—
$
—
Other loss, net
$
(5,982
)
—
5,233
—
—
—
—
—
—
—
—
—
$
(749
)
Income tax expense
$
(11,180
)
(1,907
)
(1,174
)
(7,414
)
89
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
$
22,146
$
(268
)
$
8,540
$
75,488
$
20,811
$
6,487
$
1,300
$
1,519
$
56,850
ZIFF DAVIS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN THOUSANDS)
Nine months ended September 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
Goodwill impairment of business
Cost of revenues
$
(144,707
)
$
—
$
—
$
—
$
—
$
—
$
779
$
289
$
119
$
—
$
—
$
—
$
(143,520
)
Sales and marketing
$
(361,013
)
—
—
—
—
—
—
2,447
2,468
—
—
—
$
(356,098
)
Research, development, and engineering
$
(55,883
)
—
—
—
—
—
—
2,048
671
—
—
—
$
(53,164
)
General and administrative
$
(299,842
)
—
—
—
—
—
119,281
16,022
4,415
1,328
1,400
—
$
(157,396
)
Goodwill impairment on business
$
(27,369
)
—
—
—
—
—
—
—
—
—
—
27,369
$
—
Interest expense, net
$
(28,419
)
337
—
—
—
—
—
—
—
—
—
—
$
(28,082
)
Gain on debt extinguishment, net
$
11,505
—
(12,060
)
—
—
—
—
—
—
—
—
—
$
(555
)
Loss on investment, net
$
(47,772
)
—
—
—
47,772
—
—
—
—
—
—
—
$
—
Unrealized loss on short-term investments held at period end
$
(14,165
)
—
—
14,165
—
—
—
—
—
—
—
—
$
—
Other income, net
$
12,962
—
—
—
(624
)
—
—
—
—
(111
)
—
—
$
12,227
Income tax expense
$
(33,231
)
(83
)
2,966
11,348
151
—
(29,586
)
(3,641
)
(1,796
)
(163
)
(319
)
(6,733
)
$
(61,087
)
Loss from equity method investment, net
$
(10,077
)
—
—
—
—
10,077
—
—
—
—
—
—
$
—
Total non-GAAP adjustments
$
254
$
(9,094
)
$
25,513
$
47,299
$
10,077
$
90,474
$
17,165
$
5,877
$
1,054
$
1,081
$
20,636
ZIFF DAVIS, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED, IN THOUSANDS)
The following tables set forth a reconciliation of Net cash provided by operating activities to Free cash flow:
2023
Q1
Q2
Q3
Q4
YTD
Net cash provided by operating activities
$
115,307
$
39,728
$
72,808
$
—
$
227,843
Less: Purchases of property and equipment
(30,017
)
(25,233
)
(27,226
)
—
(82,476
)
Free cash flow
$
85,290
$
14,495
$
45,582
$
—
$
145,367
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/20231108228196/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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