Ziff Davis, Inc. Q4 FY2025 earnings call

• Vivek Shah mentioned full year 2025 revenue growth of 3.5%, adjusted EBITDA growth, and $290 million free cash flow. Deployed $174 million in share repurchases. - Discussed Tech & Shopping segment challenges due to web search traffic decline, but plans to contain damage via alternative engagement sources. - Highlighted Gaming & Entertainment segment achievements like Humble Bundle's 15-year anniversary and IGN's growth. - Health & Wellness segment's record revenue and EBITDA, and AI-powered Halo tool. - Connectivity's record Q4 and new product launches. - Cybersecurity & Martech's growth driven by cybersecurity vertical. - Mentioned ongoing evaluation of potential strategic opportunities. - Bret Richter discussed Q4 and fiscal year 2025 financial results, share repurchases, acquisitions, and first quarter 2026 expectations.

For full year 2025, Ziff Davis grew revenues 3.5%, adjusted EBITDA grew slightly, and free cash flow was almost $290 million. In Q4 2025, revenues dropped 1.5% and adjusted EBITDA declined 5%. Tech & Shopping segment had an 18% revenue decline due to drop in web search traffic affecting affiliate commerce revenues. Gaming & Entertainment revenues grew 1.5% in Q4, with Humble Bundle Storefront having best revenue quarter in 5 years, IGN Entertainment social growth and engagement continued, and direct-to-consumer revenues reached almost $90 million in 2025. Health & Wellness segment had record revenue and adjusted EBITDA in 2025, growing 8.6% in Q4. Connectivity had record Q4 with revenues up 11%, Speedtest, Downdetector, RootMetrics, and Ekahau all grew. Cybersecurity & Martech revenues grew 2.7% in Q4, driven by cybersecurity vertical.

Due to current review process, formal full year 2026 guidance not provided. Expect Tech & Shopping revenues to be down mid-single digits for 2026, with improvement in second half. Other segments expect low to mid-single digit revenue growth in Gaming & Entertainment, Health & Wellness, Cybersecurity & Martech, and double-digit growth in Connectivity. Adjusted EBITDA margins should hover around 34%. First quarter 2026 consolidated revenue expected to be relatively flat or slightly negative, adjusted EBITDA margins expected to be about 3 points lower year-over-year.

Risks include those disclosed in SEC filings such as risks related to potential differences between actual results and forward-looking statements, risks associated with the Tech & Shopping segment's reliance on web search traffic, and risks related to the ongoing evaluation of potential strategic opportunities.

Q: Expand on AI search tailwinds in Tech & Shopping and other segments' resilience.

A: Vivek Shah said lost search traffic can be offset with other sources in some segments but harder in Tech & Shopping.

Q: Talk about Tech & Shopping growth rate and M&A opportunities.

A: Vivek Shah said Tech & Shopping should be mid-single-digit grower, and M&A focus on high-quality brands.

Q: Color on prospective buyers looking at divisions and ad market trends.

A: Vivek Shah said can't share much on buyers, ad market has different trends in different segments.

Q: Speak on Health & Wellness traffic, AI competition on clinician side, and M&A.

A: Vivek Shah said Health & Wellness search dynamics not a concern, M&A depends on AI licensing uncertainty.

Q: Go back to AI footprint on clinician side and M&A.

A: Vivek Shah said physicians use AI tools, M&A depends on balance of factors.