Ziff Davis Reports Fourth Quarter and Full Year 2025 Financial Results

NEW YORK--( BUSINESS WIRE)--Ziff Davis, Inc. (NASDAQ: ZD) (“Ziff Davis” or “the Company”) today reported unaudited financial results for the fourth quarter and year ended December 31, 2025.

“In 2025, Ziff Davis grew Revenues, Adjusted EBITDA, and Adjusted diluted EPS, while generating almost $290 million in Free cash flow,” said Vivek Shah, CEO of Ziff Davis. “We deployed $174 million in share repurchases during the year with the conviction that our share price does not adequately reflect the intrinsic value of our businesses.”

FOURTH QUARTER 2025 RESULTS

FULL YEAR 2025 RESULTS

The following table reflects results for the three months and years ended December 31, 2025 and 2024, respectively (in millions, except per share amounts).

(Unaudited)

Three months ended December 31,

% Change

Years ended December 31,

% Change

2025

2024

2025

2024

Revenues (1)

Technology & Shopping

$108.9

$132.9

(18.0)%

$356.6

$361.9

(1.5)%

Gaming & Entertainment

$51.7

$50.9

1.5%

$183.6

$180.3

1.8%

Health & Wellness

$114.9

$105.7

8.6%

$402.4

$362.4

11.0%

Connectivity

$60.3

$54.3

11.2%

$230.7

$213.6

8.0%

Cybersecurity & Martech

$70.9

$69.0

2.7%

$278.0

$283.5

(1.9)%

Total revenues (1)

$406.7

$412.8

(1.5)%

$1,451.3

$1,401.7

3.5%

Income from operations

$86.0

$78.5

9.6%

$183.1

$113.6

61.1%

Operating income margin

21.2%

19.0%

2.2%

12.6%

8.1%

4.5%

Net income (2)

$0.4

$64.1

(99.4)%

$47.4

$63.0

(24.8)%

Net income per diluted share (2)

$0.01

$1.43

(99.3)%

$1.15

$1.42

(19.0)%

Adjusted EBITDA (3)

$163.2

$171.8

(5.0)%

$495.1

$493.5

0.3%

Adjusted EBITDA margin (3)

40.1%

41.6%

(1.5)%

34.1%

35.2%

(1.1)%

Adjusted net income (2)(3)

$100.5

$110.2

(8.8)%

$272.5

$294.5

(7.4)%

Adjusted diluted EPS (2)(3)

$2.56

$2.58

(0.8)%

$6.63

$6.62

0.2%

Net cash provided by operating activities

$191.1

$158.2

20.8%

$407.1

$390.3

4.3%

Free cash flow (3)

$157.8

$131.1

20.4%

$287.9

$283.7

1.5%

Notes:

(1)

The revenues associated with each of the reportable segments may have been rounded when presented independently so they foot precisely to Total Revenues.

(2)

GAAP effective tax rates were approximately (1.0)% and 18.3% for the three months ended December 31, 2025 and 2024, respectively, and 31.5% and 44.4% for the years ended December 31, 2025 and 2024, respectively. Adjusted effective tax rates were approximately 21.4% and 22.8% for the three months ended December 31, 2025 and 2024, respectively, and 23.5% and 23.5% for the years ended December 31, 2025 and 2024, respectively.

(3)

For definitions of non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures refer to section “Non-GAAP Financial Measures” further in this release.

ZIFF DAVIS GUIDANCE

As noted in the Company’s Third Quarter 2025 earnings release, Ziff Davis has engaged outside advisors to assist in evaluating value-creating opportunities, including the potential sale of entire divisions of the Company. As this process is ongoing, the Company is deferring its fiscal 2026 guidance.

EARNINGS CONFERENCE CALL AND AUDIO WEBCAST

Ziff Davis will host a live audio webcast and conference call discussing its fourth quarter and year-end 2025 financial results on Tuesday, February 24, 2026, at 8:30AM ET. The live webcast and call will be accessible by phone by dialing (844) 985-2014 or via www.ziffdavis.com. Following the event, the audio recording and presentation materials will be archived and made available at www.ziffdavis.com.

ABOUT ZIFF DAVIS

Ziff Davis, Inc. (NASDAQ: ZD) is a vertically focused digital media and internet company whose portfolio includes leading brands in technology, shopping, gaming and entertainment, health and wellness, connectivity, cybersecurity, and martech. For more information, visit www.ziffdavis.com.

“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including those contained in Vivek Shah’s quote and the “Ziff Davis Guidance” section. These forward-looking statements are based on management’s current expectations or beliefs and are subject to numerous assumptions, risks, and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These factors and uncertainties include, among other items: the Company’s ability to grow advertising, licensing, and subscription revenues, profitability, and cash flows, particularly in light of an uncertain U.S. or worldwide economy, including the possibility of economic downturn or recession; the Company’s ability to make interest and debt payments; the Company’s ability to identify, close, and successfully transition acquisitions or divestitures; customer growth and retention; the Company’s ability to create compelling content; our reliance on third-party platforms; the threat of content piracy and developments related to artificial intelligence; increased competition and rapid technological changes; variability of the Company’s revenue based on changing conditions in particular industries and the economy generally; protection of the Company’s proprietary technology; the risk of alleged infringement by the Company of intellectual property of others; the risk of losing critical third-party vendors or key personnel; the risks associated with fraudulent activity, system failure, or a security breach; risks related to our ability to adhere to our internal controls and procedures; the risk of adverse changes in the U.S. or international regulatory environments, including but not limited to the imposition or increase of taxes or regulatory-related fees; the risks related to supply chain disruptions, increased tariffs and trade protection measures, inflationary conditions, and rising interest rates; the risk of liability for legal and other claims; our ability to consummate a sale of one or more of our business lines pursuant to our announced review of potential value-creating opportunities; and the numerous other factors set forth in Ziff Davis’ filings with the Securities and Exchange Commission (“SEC”). For a more detailed description of the risk factors and uncertainties affecting Ziff Davis, refer to our most recent Annual Report on Form 10-K and the other reports filed by Ziff Davis from time-to-time with the SEC, each of which is available at www.sec.gov. The forward-looking statements provided in this press release, including those contained in Vivek Shah’s quote and the “Ziff Davis Guidance” section are based on limited information available to the Company at this time, which is subject to change. Although management’s expectations may change after the date of this press release, the Company undertakes no obligation to revise or update these statements.

ZIFF DAVIS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED, IN THOUSANDS)

December 31, 2025

December 31, 2024

ASSETS

Cash and cash equivalents

607,011

505,880

Accounts receivable, net of allowances of $9,216 and $8,148, respectively

667,216

660,223

Prepaid expenses and other current assets

96,172

105,966

Total current assets

1,370,399

1,272,069

Long-term investments

93,228

158,187

Property and equipment, net of accumulated depreciation of $463,649 and $361,710, respectively

213,179

197,216

Intangible assets, net

344,212

425,749

Goodwill

1,607,537

1,580,258

Deferred income taxes

5,286

7,487

Other assets

29,465

63,368

TOTAL ASSETS

3,663,306

3,704,334

LIABILITIES AND STOCKHOLDERS’ EQUITY

Accounts payable and accrued expenses

709,434

670,769

Income taxes payable, current

9,509

19,715

Deferred revenue, current

189,992

199,664

Current portion of long-term debt

148,685

—

Other current liabilities

17,333

9,499

Total current liabilities

1,074,953

899,647

Long-term debt

717,815

864,282

Deferred revenue, noncurrent

18,948

5,504

Liability for uncertain tax positions

19,733

30,296

Deferred income taxes

41,412

46,018

Other noncurrent liabilities

36,870

47,705

TOTAL LIABILITIES

1,909,731

1,893,452

Common stock

384

428

Additional paid-in capital

472,723

491,891

Retained earnings

1,337,542

1,401,034

Accumulated other comprehensive loss

(57,074

)

(82,471

)

TOTAL STOCKHOLDERS’ EQUITY

1,753,575

1,810,882

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

3,663,306

3,704,334

ZIFF DAVIS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED, IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

Three months ended December 31,

Years ended December 31,

2025

2024

2025

2024

Total revenues

406,712

412,823

1,451,268

1,401,688

Operating costs and expenses:

Direct costs

57,264

53,242

206,598

200,323

Sales and marketing

136,212

150,510

543,325

519,694

Research, development, and engineering

14,206

17,549

61,962

67,373

General, administrative, and other related costs

55,051

53,029

210,027

203,461

Depreciation and amortization

57,934

59,971

228,691

211,916

Goodwill impairment

—

17,579

85,273

Total operating costs and expenses

320,667

334,301

1,268,182

1,288,040

Income from operations

86,045

78,522

183,086

113,648

Interest expense, net

(6,760

)

(6,391

)

(25,910

)

(13,988

)

Loss on sale of businesses

(57,988

)

—

(57,988

)

(3,780

)

Gain (loss) on investments, net

—

5,018

(7,654

)

Provision for credit losses on investments

—

(17,566

)

—

Other (loss) income, net

(1,402

)

2,438

(5,893

)

4,968

Income before income tax expense and (loss) income from equity method investment

19,895

74,569

80,747

93,194

Income tax benefit (expense)

204

(13,610

)

(25,447

)

(41,370

)

(Loss) income from equity method investment, net of tax

(19,729

)

3,128

(7,946

)

11,223

Net income

370

64,087

47,354

63,047

Net income per common share:

Basic

0.01

1.51

1.16

1.42

Diluted

0.01

1.43

1.15

1.42

Weighted average shares outstanding:

Basic

39,101,794

42,577,188

40,977,183

44,457,071

Diluted

39,281,790

46,690,090

41,098,514

44,519,693

ZIFF DAVIS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED, IN THOUSANDS)

Years ended December 31,

2025

2024

Cash flows from operating activities:

Net income

47,354

63,047

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

228,691

211,916

Non-cash operating lease costs

9,001

10,923

Share-based compensation

44,927

40,915

Provision for credit losses on accounts receivable

4,027

2,898

Provision for credit losses on investments

17,566

—

Deferred income taxes, net

3,961

(18,822

)

Loss on sale of businesses

57,988

3,780

Goodwill impairment

17,579

85,273

Changes in fair value of contingent consideration

(2,834

)

—

Loss (income) from equity method investments

7,946

(11,223

)

(Gain) loss on investment, net

(5,018

)

7,654

Other

3,067

3,601

Decrease (increase) in:

Accounts receivable

(8,381

)

(153,121

)

Prepaid expenses and other current assets

(9,347

)

(17,153

)

Other assets

9,759

11,367

Increase (decrease) in:

Accounts payable and income taxes payable

2,578

171,280

Deferred revenue

(4,584

)

5,043

Accrued liabilities and other current liabilities

(17,212

)

(27,063

)

Net cash provided by operating activities

407,068

390,315

Cash flows from investing activities:

Purchases of property and equipment

(119,198

)

(106,635

)

Acquisitions, net of cash received

(67,340

)

(217,570

)

Distribution from equity method investment

10,756

—

Proceeds from sale of equity investments

25,250

19,455

Proceeds from sale of equity method investment

860

—

Proceeds from sale of businesses, net of cash divested

3,579

7,860

Other

338

(565

)

Net cash used in investing activities

(145,755

)

(297,455

)

Cash flows from financing activities:

Payment of debt

—

(134,989

)

Debt extinguishment costs

—

(277

)

Repurchase of common stock

(173,792

)

(185,181

)

Issuance of common stock under employee stock purchase plan

6,542

8,371

Deferred payments for acquisitions

(1,344

)

(7,842

)

Other

(1,700

)

(1,076

)

Net cash used in financing activities

(170,294

)

(320,994

)

Effect of exchange rate changes on cash and cash equivalents

10,112

(3,598

)

Net change in cash and cash equivalents

101,131

(231,732

)

Cash and cash equivalents at beginning of year

505,880

737,612

Cash and cash equivalents at end of year

607,011

505,880

Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (“GAAP”), we use the following non-GAAP financial measures: Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income (loss), Adjusted net income (loss) per diluted share, Free cash flow, and Adjusted effective tax rate (collectively the “non-GAAP financial measures”). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We use these non-GAAP financial measures for financial and operational decision making and as means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain items that may not be indicative of our recurring core business operating results or, in certain cases, may be non-cash in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance and liquidity. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making, (2) certain measures are used to determine the amount of annual incentive compensation paid to our named executive officers, and (3) they are used by the analyst community to help them analyze the health of our business.

These non-GAAP financial measures are not measures presented in accordance with GAAP, and our use of these terms may vary from that of other companies, limiting their usefulness for comparison purposes. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. These non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations determined in accordance with GAAP.

Non-GAAP financial measures exclude the certain items listed below. We believe that excluding these items from the non-GAAP measures facilitates comparisons to historical operating results and comparisons to peers, many of which exclude similar items. We believe that non-GAAP financial measures provide meaningful supplemental information regarding operational performance. We further believe these measures are useful to investors in that they allow for greater transparency of certain line items in the Company’s financial statements.

Adjusted EBITDA is defined as Net income (loss) with adjustments to reflect the addition or elimination of certain items including, but not limited to:

Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Total Revenues.

Adjusted net income (loss) is defined as Net income (loss) with adjustments to reflect the addition or elimination of certain statement of operations items including, but not limited to:

Adjusted net income (loss) per diluted share is calculated by dividing Adjusted net income (loss) by the diluted weighted average shares of common stock outstanding excluding the effect of convertible debt dilution.

Free cash flow is defined as Net cash provided by operating activities, less purchases of property and equipment, plus changes in contingent consideration (if any).

Adjusted effective tax rate is calculated based upon the GAAP effective tax rate with adjustments for the tax applicable to non-GAAP adjustments to Net income (loss), generally based upon the effective marginal tax rate of each adjustment.

ZIFF DAVIS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS)

The following table sets forth a reconciliation of Net income to Adjusted EBITDA:

Three months ended December 31,

Years ended December 31,

2025

2024

2025

2024

Net income

370

64,087

47,354

63,047

Interest expense, net

6,760

6,391

25,910

13,988

Loss on sale of businesses

57,988

—

57,988

3,780

(Gain) loss on investment, net

—

(5,018

)

7,654

Provision for credit losses on investments

—

17,566

—

Other loss (income), net

1,402

(2,438

)

5,893

(4,968

)

Income tax (benefit) expense

(204

)

13,610

25,447

41,370

Loss (income) from equity method investment, net of tax

19,729

(3,128

)

7,946

(11,223

)

Depreciation and amortization

57,934

59,971

228,691

211,916

Share-based compensation

11,251

10,282

44,927

40,915

Transaction, integration, and other charges

5,870

23,036

17,116

40,395

Lease asset impairments and other charges

2,120

)

3,712

1,361

Goodwill impairment

—

17,579

85,273

Adjusted EBITDA

163,220

171,802

495,111

493,508

ZIFF DAVIS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS)

The following tables set forth Revenues and a reconciliation of Income (loss) from operations to Adjusted EBITDA by segment:

Three months ended December 31, 2025

Technology & Shopping

Gaming & Entertainment

Health & Wellness

Connectivity

Cybersecurity & Martech

Corporate

Total

Revenues

108,941

51,728

114,809

60,328

70,906

—

406,712

Income (loss) from operations

21,161

18,318

33,546

21,341

11,464

(19,785

)

86,045

Depreciation and amortization

22,827

3,119

13,767

7,259

10,822

140

57,934

Share-based compensation

1,450

469

1,614

979

1,176

5,563

11,251

Transaction, integration, and other charges

1,355

359

468

(756

)

4,422

5,870

Lease asset impairments and other charges

357

1,087

(107

)

171

612

—

2,120

Adjusted EBITDA

47,150

23,015

49,179

30,218

23,318

(9,660

)

163,220

Three months ended December 31, 2024

Technology & Shopping

Gaming & Entertainment

Health & Wellness

Connectivity

Cybersecurity & Martech

Corporate

Total

Revenues

132,922

50,941

105,671

54,248

69,041

—

412,823

Income (loss) from operations

22,245

20,244

27,058

17,500

9,095

(17,620

)

78,522

Depreciation and amortization

25,313

2,869

13,849

9,397

8,505

59,971

Share-based compensation

1,164

190

1,411

638

1,097

5,782

10,282

Transaction, integration, and other charges

9,710

1,323

4,509

1,987

3,587

1,920

23,036

Lease asset impairments and other charges

(179

)

—

)

Adjusted EBITDA

58,253

24,720

46,827

29,522

22,360

(9,880

)

171,802

Figures above are net of inter-segment revenues and operating costs and expenses.

ZIFF DAVIS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS)

Year ended December 31, 2025

Technology & Shopping

Gaming & Entertainment

Health & Wellness

Connectivity

Cybersecurity & Martech

Corporate

Total

Revenues

356,596

183,558

402,353

230,733

278,028

—

1,451,268

Income (loss) from operations

9,302

53,035

89,384

76,113

28,597

(73,345

)

183,086

Depreciation and amortization

90,880

11,740

54,472

29,027

42,151

421

228,691

Share-based compensation

5,462

1,676

6,301

3,413

4,513

23,562

44,927

Transaction, integration, and other charges

7,367

1,198

(530

)

2,167

(926

)

7,840

17,116

Lease asset impairments and other charges

804

1,374

354

171

1,009

—

3,712

Goodwill impairment

—

17,579

—

17,579

Adjusted EBITDA

113,815

69,023

149,981

110,891

92,923

(41,522

)

495,111

Year ended December 31, 2024

Technology & Shopping

Gaming & Entertainment

Health & Wellness

Connectivity

Cybersecurity & Martech

Corporate

Total

Revenues

361,882

180,276

362,408

213,620

283,502

—

1,401,688

(Loss) income from operations

(71,072

)

54,001

67,207

79,374

54,961

(70,823

)

113,648

Depreciation and amortization

83,424

10,733

52,766

31,882

33,025

211,916

Share-based compensation

5,014

1,070

5,604

2,658

4,631

21,938

40,915

Transaction, integration, and other charges

18,530

2,727

9,788

(3,823

)

5,415

7,758

40,395

Lease asset impairments and other charges

223

—

756

274

1,361

Goodwill impairment

85,273

—

85,273

Adjusted EBITDA

121,392

68,624

135,380

110,091

98,788

(40,767

)

493,508

____________________

Figures above are net of inter-segment revenues and operating costs and expenses.

ZIFF DAVIS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The following tables set forth a reconciliation of Net income to Adjusted net income with adjustments presented on after-tax basis:

Three months ended December 31,

2025

Per diluted

share (1)

2024

Per diluted

share (1)

Net income

370

0.01

64,087

1.43

Interest, net

—

Loss on sale of businesses

43,491

1.11

—

Loss on investments, net

—

942

0.02

Loss (income) from equity method investment, net

19,729

0.50

(3,128

)

(0.07

)

Amortization

20,677

0.53

25,040

0.59

Share-based compensation

9,611

0.24

5,178

0.12

Transaction, integration, and other charges

5,018

0.13

18,003

0.42

Lease asset impairment and other charges

1,523

0.04

—

Dilutive effect of the convertible debt

—

0.07

Adjusted net income

100,504

2.56

110,189

2.58

Years ended December 31,

2025

Per diluted

share (1)

2024

Per diluted

share (1)

Net income

47,354

1.15

63,047

1.42

Interest, net

269

0.01

132

—

Loss on sale of businesses

43,491

1.06

103

—

(Gain) loss on investments, net

(5,018

)

(0.12

)

8,019

0.18

Provision for credit losses on investments

17,566

0.42

—

Loss (income) from equity method investment, net

7,946

0.19

(11,223

)

(0.25

)

Amortization

89,743

2.18

87,052

1.96

Share-based compensation

36,903

0.90

31,013

0.70

Transaction, integration, and other charges

13,934

0.34

30,000

0.67

Lease asset impairment and other charges

2,779

0.07

1,045

0.02

Goodwill impairment

17,579

0.43

85,273

1.92

Adjusted net income

272,546

6.63

294,461

6.62

(1)

The reconciliation of Net income per diluted share to Adjusted net income per diluted share may not foot since each is calculated independently.

ZIFF DAVIS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS)

The following are the adjustments to certain statement of operations items used to derive Adjusted net income, which we believe provide useful information about our operating results and enhance the overall understanding of past financial performance and future prospects of the Company.

Three months ended December 31, 2025

GAAP amount

Adjustments

Adjusted

non-GAAP amount

Interest, net

(Gain) loss on sale of business

(Gain) loss on investments, net

(Income) loss from equity method investments, net

Amortization

Share-based compensation

Transaction, integration, and other charges

Lease asset impairments and other charges

Direct costs

(57,264

)

—

(57,131

)

Sales and marketing

(136,212

)

—

1,303

771

—

(134,138

)

Research, development, and engineering

(14,206

)

—

931

—

(13,185

)

General, administrative, and other related costs

(55,051

)

—

8,944

4,949

2,120

(39,038

)

Depreciation and amortization

(57,934

)

—

31,052

—

(26,882

)

Interest expense, net

(6,760

)

112

—

(6,648

)

Loss on sale of business

(57,988

)

—

57,988

—

Other loss, net

(1,402

)

—

(369

)

—

(1,771

)

Income tax benefit (expense) (1)

204

(27

)

(14,497

)

—

(10,375

)

(1,640

)

(483

)

(597

)

(27,415

)

Loss from equity method investment, net of tax

(19,729

)

—

19,729

—

Total non-GAAP adjustments

43,491

—

19,729

20,677

9,611

5,018

1,523

(1)

Adjusted effective tax rate was approximately 21.4% for the three months ended December 31, 2025. The calculation is based on a ratio where the numerator is the adjusted income tax expense of $27,415 and the denominator is $127,919, which equals adjusted net income of $100,504 plus adjusted income tax expense.

ZIFF DAVIS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS)

Three months ended December 31, 2024

GAAP amount

Adjustments

Adjusted

non-GAAP amount

Interest, net

(Gain) loss on sale of business

(Gain) loss on investments, net

(Income) loss from equity method investments, net

Amortization

Share-based compensation

Transaction, integration, and other charges

Lease asset impairments and other charges

Direct costs

(53,242

)

—

425

—

(52,760

)

Sales and marketing

(150,510

)

—

891

13,366

—

(136,253

)

Research, development, and engineering

(17,549

)

—

735

3,926

—

(12,888

)

General, administrative, and other related costs

(53,029

)

—

8,599

5,319

)

(39,120

)

Depreciation and amortization

(59,971

)

—

34,965

—

(25,006

)

Interest expense, net

(6,391

)

—

(6,311

)

Other income, net

2,438

—

(237

)

—

2,201

Income tax expense (1)

(13,610

)

(20

)

—

942

—

(9,925

)

(5,104

)

(4,796

)

(32,497

)

Income from equity method investment, net of tax

3,128

—

(3,128

)

—

Total non-GAAP adjustments

—

942

(3,128

)

25,040

5,178

18,003

(1)

Adjusted effective tax rate was approximately 22.8% for the three months ended December 31, 2024. The calculation is based on a ratio where the numerator is the adjusted income tax expense of $32,497 and the denominator is $142,686, which equals adjusted net income of $110,189 plus adjusted income tax expense.

ZIFF DAVIS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS)

Year ended December 31, 2025

GAAP amount

Adjustments

Adjusted non-GAAP amount

Interest, net

(Gain) loss on sale of business

(Gain) loss on investments, net

Provision for credit losses on investments

(Income) loss from equity method investments, net

Amortization

Share-based compensation

Transaction, integration, and other charges

Lease asset impairments and other charges

Goodwill impairment

Direct costs

(206,598

)

—

276

120

—

(206,202

)

Sales and marketing

(543,325

)

—

4,958

5,743

—

(532,624

)

Research, development, and engineering

(61,962

)

—

3,592

719

—

(57,651

)

General, administrative, and other related costs

(210,027

)

—

36,101

10,534

3,712

—

(159,680

)

Depreciation and amortization

(228,691

)

—

121,696

—

(106,995

)

Goodwill impairment

(17,579

)

—

17,579

—

Interest expense, net

(25,910

)

358

—

(25,552

)

Loss on sale of business

(57,988

)

—

57,988

—

Gain on investments, net

5,018

—

(5,018

)

—

Provision for credit losses on investments

(17,566

)

—

17,566

—

Other loss, net

(5,893

)

—

(369

)

(119

)

—

(6,381

)

Income tax expense (1)

(25,447

)

(89

)

(14,497

)

—

(31,953

)

(8,024

)

(2,813

)

(814

)

—

(83,637

)

Loss from equity method investment, net

(7,946

)

—

7,946

—

Total non-GAAP adjustments

269

43,491

(5,018

)

17,566

7,946

89,743

36,903

13,934

2,779

17,579

(1)

Adjusted effective tax rate was approximately 23.5% for the year ended December 31, 2025. The calculation is based on a ratio where the numerator is the adjusted income tax expense of $83,637 and the denominator is $356,183, which equals adjusted net income of $272,546 plus adjusted income tax expense.

ZIFF DAVIS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS)

Year ended December 31, 2024

GAAP amount

Adjustments

Adjusted non-GAAP amount

Interest, net

(Gain) loss on sale of business

(Gain) loss on investments, net

(Income) loss from equity method investments, net

Amortization

Share-based compensation

Transaction, integration, and other charges

Lease asset impairments and other charges

Goodwill impairment

Direct costs

(200,323

)

—

248

760

—

(199,315

)

Sales and marketing

(519,694

)

—

3,756

19,072

—

(496,866

)

Research, development, and engineering

(67,373

)

—

3,665

6,556

—

(57,152

)

General, administrative, and other related costs

(203,461

)

—

33,246

14,007

1,361

—

(154,847

)

Depreciation and amortization

(211,916

)

—

117,748

—

(94,168

)

Goodwill impairment

(85,273

)

—

85,273

—

Interest expense, net

(13,988

)

176

—

(13,812

)

Loss on sale of business

(3,780

)

—

3,780

—

Loss on investments, net

(7,654

)

—

7,654

—

Other income (loss), net

4,968

—

(4,903

)

—

(774

)

—

(709

)

Income tax expense (1)

(41,370

)

(44

)

1,226

365

—

(30,696

)

(9,902

)

(9,621

)

(316

)

—

(90,358

)

Income from equity method investment, net

11,223

—

(11,223

)

—

Total non-GAAP adjustments

132

103

8,019

(11,223

)

87,052

31,013

30,000

1,045

85,273

(1)

Adjusted effective tax rate was approximately 23.5% for the year ended December 31, 2024. The calculation is based on a ratio where the numerator is the adjusted income tax expense of $90,358 and the denominator is $384,819, which equals adjusted net income of $294,461 plus adjusted income tax expense.

ZIFF DAVIS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS)

The following tables set forth a reconciliation of Net cash provided by operating activities to Free cash flow:

2025

Full Year

Net cash provided by operating activities

20,613

57,074

138,299

191,082

407,068

Less: Purchases of property and equipment

(25,619

)

(30,133

)

(30,136

)

(33,310

)

(119,198

)

Free cash flow

(5,006

)

26,941

108,163

157,772

287,870

2024

Full Year

Net cash provided by operating activities

75,558

50,564

105,960

158,233

390,315

Less: Purchases of property and equipment

(28,129

)

(25,504

)

(25,843

)

(27,159

)

(106,635

)

Free cash flow

47,429

25,060

80,117

131,074

283,680