Ziff Davis (ZD) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue rose 3.7% year-over-year to $353.6 million, with adjusted EBITDA up 9.6% to $124.7 million and adjusted EPS up 9.3% to $1.64, marking the strongest quarter of the year.

• Net loss widened to $48.6 million, primarily due to an $85.3 million goodwill impairment in Digital Media, compared to a $31.0 million net loss and $56.9 million impairment in Q3 2023.

• Digital Media segment revenue increased 5.8% year-over-year, driven by acquisitions and higher advertising and subscription revenue, while Cybersecurity and Martech revenue declined 4.1%.

• Major acquisitions included CNET Media and TDS Gift Cards, with active M&A dialogues ongoing across all portfolio areas.

• Free cash flow for Q3 was $80.1 million, up 75.8% year-over-year, and cash and investments at quarter-end totaled $538.9 million after significant share repurchases and acquisitions.

Financial highlights

• Q3 2024 adjusted EBITDA margin reached 35.3%, a 200 basis point improvement year-over-year.

• Q3 2024 net loss per diluted share was $1.11, while adjusted diluted EPS increased to $1.64.

• For the nine months ended September 30, 2024, total revenues grew 1.5% to $988.9 million, and adjusted EBITDA rose 2.2% to $321.7 million.

• Free cash flow for the nine months was $152.6 million, up 5.0% year-over-year.

• Cash and cash equivalents at September 30, 2024, were $386.1 million, down from $737.6 million at year-end 2023.

Outlook and guidance

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

• Q4 is expected to deliver high single-digit growth in revenue and adjusted EBITDA, and double-digit adjusted EPS growth.

• Management remains optimistic about continued momentum into Q4 and 2025, focusing on margin improvement and bottom-line growth.