Ziff Davis Reports Positive Earnings with Key Segment Growth

Ziff Davis, Inc. ((ZD)) has held its Q1 earnings call. Read on for the main highlights of the call.

The recent earnings call for Ziff Davis, Inc. painted a generally positive picture, highlighting growth in several key segments such as Tech and Shopping, Health and Wellness, and strong advertising performance. Despite these positive developments, challenges persist in the Cybersecurity and Martech segment, and a lawsuit against OpenAI underscores ongoing issues with content protection.

Revenue and EBITDA Growth

Ziff Davis reported Q1 2025 revenues of $328.6 million, marking a 4.5% increase compared to Q1 2024. The company also exceeded internal expectations with an adjusted EBITDA of $100.2 million and a margin of 30.5%.

Tech and Shopping Segment Performance

The Tech and Shopping segment showed impressive growth, with revenues increasing by nearly 18% due to organic growth and mergers and acquisitions. This segment’s adjusted EBITDA grew by nearly 44%, reflecting strong performance.

Advertising and Performance Marketing Growth

Advertising and performance marketing revenues grew by 12.3% in Q1 2025 compared to the previous period, showcasing the company’s robust advertising capabilities.

Health and Wellness Segment Rebound

The Health and Wellness segment experienced a rebound, with revenues growing over 7% and adjusted EBITDA increasing by over 12%, indicating a promising return to high-single-digit growth.

Strong Capital Allocation and Share Buybacks

Ziff Davis demonstrated strong capital allocation by buying back 4.25 million shares over the last four quarters, representing roughly 10% of total shares outstanding.

Cybersecurity and Martech Segment Decline

The Cybersecurity and Martech segment faced challenges, with revenues declining nearly 11%, partly due to timing benefits in the prior year’s first quarter.

Gaming and Entertainment EBITDA Decline

The Gaming and Entertainment segment saw a decline in adjusted EBITDA due to revenue mix and expense timing, though this is expected to reverse in Q2.

Subscription and Licensing Revenue Decline

Subscription and licensing revenues declined by 2% in Q1 2025, highlighting a need for strategic adjustments in this area.

Lawsuit Against OpenAI

Ziff Davis has filed a lawsuit against OpenAI over unauthorized use of its content, emphasizing the ongoing challenges in protecting intellectual property.

Forward-Looking Guidance

During the earnings call, CEO Vivek Shah and CFO Bret Richter reaffirmed their guidance for full-year revenue growth of 5% and adjusted EBITDA growth of 6% at the midpoint. The company remains focused on strategic mergers and acquisitions, with three acquisitions completed in 2025 so far, and plans to enhance shareholder value through continued share buybacks. Despite macroeconomic uncertainties, Ziff Davis is optimistic about sustained advertising growth and anticipates benefits from the upcoming launch of Wi-Fi 7 and Nintendo Switch 2.

In summary, Ziff Davis, Inc. presented a positive outlook during its earnings call, with significant growth in key segments and a strong advertising performance. While challenges remain, particularly in the Cybersecurity and Martech segment, the company is optimistic about future growth and continues to focus on strategic initiatives to enhance shareholder value.