Ziff Davis (ZD) Q4 2024 earnings summary

Executive summary

• FY 2024 revenue grew 2.8% to $1.4 billion, with Q4 revenue up 5.9% to $412.8 million; adjusted diluted EPS rose 6.9% to $6.62 and adjusted EBITDA increased 2.3% to $493.5 million.

• Q4 2024 adjusted EBITDA was $171.8 million, up 2.5% year-over-year, and adjusted diluted EPS was $2.58, up 10.7%.

• Q4 revenue fell slightly short of internal estimates due to underperformance in Humble Games and connectivity, but 2024 marked a return to growth and record free cash flow since the 2021 spinoff.

• Net income for Q4 increased 1.0% to $64.1 million; full-year net income up 51.9% to $63.0 million, despite a significant goodwill impairment.

• Introduced a new five-segment reporting structure in 2024.

Financial highlights

• Q4 adjusted EBITDA margin was 41.6%; full-year 2024 adjusted EBITDA margin was 35.2%.

• Free cash flow for FY 2024 was $283.7 million, up 34.3% year-over-year; Q4 free cash flow nearly doubled to $131.1 million.

• Advertising and performance marketing revenue grew 10.6% in Q4 and 4.1% for the year; subscription and licensing revenue grew 1% in Q4 and nearly 2% for the year.

• Net advertising revenue retention was 92% in Q4, with 1,899 advertisers and average quarterly revenue per advertiser over $135,000.

• Subscription and licensing churn rate remained stable at 2.83% in Q4 2024.

Outlook and guidance

• 2025 revenue guidance: $1.44 billion–$1.50 billion, representing 2.9%–7.2% growth; midpoint is 5%.

• Adjusted EBITDA guidance midpoint is $523 million (6% growth), with a range of $494 million–$542 million (2.3%–9.8% growth).

• Adjusted diluted EPS guidance: $6.64–$7.28, up 0.3%–10.0%; midpoint is $6.96 (5.1% growth).

• Q1 2025 expected to be muted, with stronger growth in the second half; adjusted EBITDA margin projected at 35.5% for 2025.

• Guidance does not include incremental M&A or additional share repurchases.