Ziff Davis (ZD) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues declined 1.6% year-over-year to $320.8 million, with net income rising to $36.9 million from $16.7 million and diluted EPS up to $0.77 from $0.36.

• Adjusted EBITDA fell 9.8% to $96.3 million, and adjusted diluted EPS was $1.18, down from $1.27 in Q2 2023.

• Digital Media segment was nearly flat, while Cybersecurity and Martech revenue declined 5.8% year-over-year.

• Recent and pending acquisitions, including CNET and Gamer Network, are expected to drive future growth and strengthen core verticals.

• Share repurchases totaled about $84–$85 million in Q2 2024, with authorization increased to 15 million shares.

Financial highlights

• Q2 2024 revenues: $320.8 million, down from $326 million in Q2 2023; net income was $36.9 million, up 121% year-over-year.

• Adjusted EBITDA: $96.3 million, down 9.8% year-over-year; margin at 30%.

• Adjusted diluted EPS: $1.18, compared to $1.27 in Q2 2023.

• Free cash flow for Q2 2024 was $25.1 million, up from $14.5 million a year ago; cash and investments at quarter-end were $839.7 million.

• Operating income margin dropped to 8.9% from 11.9% in Q2 2023.

Outlook and guidance

• Full-year 2024 revenue guidance reaffirmed at $1,411–$1,471 million, with adjusted EBITDA expected between $500–$521 million and adjusted diluted EPS projected at $6.43–$6.77.

• Management expects improvement in Digital Media as acquisitions are integrated and advertising shifts online.

• Guidance excludes amortization of acquired intangibles and unanticipated items.

• Sufficient liquidity is anticipated for at least the next 12 months, supported by cash, operations, and credit facility.