Ziff Davis (ZD) The Citigroup Global TMT Conference 2024 summary

Business evolution and performance

• Grew from a $22 million acquisition in 2010 to $1.4 billion in revenue, with a focus on digital transformation and acquisitions.

• Revenue split between advertising and subscriptions, with recent years showing flat growth due to advertising headwinds.

• Subscription business remains steady, with 3.4 million subscribers and ARPU of $140–$160.

• Maintained a strong balance sheet, significant free cash flow, and increased capacity for future transactions.

• Positioned for renewed M&A activity as market valuations become more attractive.

M&A strategy and capital allocation

• Recent acquisition of CNET strengthens leadership in the tech media vertical and offers revenue synergies.

• Maintains a disciplined, patient approach to acquisitions, seeking IRRs above 20%.

• Expects to return to historical levels of capital deployment, with nearly 100% of free cash flow allocated to acquisitions.

• No bias toward public or private targets; prefers acquisitions within existing verticals for stronger synergies.

• Expanded revolver to $350 million and extended convertible maturities, enhancing financial flexibility.

Advertising and vertical performance

• Ad business operates in four main verticals: technology, gaming, retail, and health, focusing on direct sales and enterprise clients.

• Tech vertical faces headwinds, especially in B2B, while gaming and health show growth.

• Retail vertical impacted by specific partner and distribution issues, expected to normalize soon.

• Maintains leading positions in key verticals, with a vertical-specific approach to ad trends.