Ziff Davis (ZD) Q3 2024 earnings summary

Executive summary

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

• Net loss for Q3 2024 was $48.6 million, primarily due to an $85.3 million goodwill impairment in Digital Media.

• Digital Media segment revenue grew 5.8%, driven by acquisitions (CNET, TDS Gift Cards) and organic growth, while Cybersecurity and Martech revenue declined 4.1%.

• Free cash flow surged 75.8% to $80.1 million in Q3, with $153 million year-to-date; $96.1 million was used for share repurchases and $154.9 million for acquisitions.

• ESG progress included a 15-point CSA score increase (95th percentile) and a silver EcoVadis medal.

Financial highlights

• Q3 2024 adjusted EBITDA margin was 35.3%, up from 33.3% in Q3 2023.

• Q3 2024 net loss per diluted share was $1.11, compared to $0.67 in Q3 2023; adjusted diluted EPS increased to $1.64.

• Advertising and performance marketing revenue rose 5.8% year-over-year to $194 million; subscription and licensing revenue grew 1.8% to $147 million, with 3,490 customers and churn at 2.85%.

• Free cash flow for Q3 was $80.1 million, up 75.8% year-over-year.

• Cash and investments at quarter-end totaled $538.9 million.

Outlook and guidance

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

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

• Management expects Digital Media to improve as recent acquisitions are integrated and advertising shifts online.