Ziff Davis’ third quarter performance showed modest revenue growth, but both sales and non-GAAP profit came in slightly below Wall Street expectations. Management attributed the results to continued strength in its Health & Wellness division and growth in several key product areas, offset by softness in Tech & Shopping due to the wind-down of game publishing activities. CEO Vivek Shah highlighted the company’s enhanced segment-level reporting and operational focus, noting that three out of five business units grew revenue in the quarter. Shah also pointed to a strong performance from CNET and the Health & Wellness segment, which saw 13% year-over-year revenue growth, as contributors to the quarter.
Is now the time to buy ZD? Find out in our full research report (it’s free for active Edge members).
Ziff Davis (ZD) Q3 CY2025 Highlights:
- Revenue: $363.7 million vs analyst estimates of $365.7 million (2.9% year-on-year growth, 0.5% miss)
- Adjusted EPS: $1.76 vs analyst expectations of $1.78 (1.4% miss)
- Adjusted EBITDA: $124.1 million vs analyst estimates of $131.2 million (34.1% margin, 5.4% miss)
- The company reconfirmed its revenue guidance for the full year of $1.47 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $6.96 at the midpoint
- EBITDA guidance for the full year is $523.5 million at the midpoint, above analyst estimates of $518.9 million
- Operating Margin: 7.8%, up from -8.3% in the same quarter last year
- Market Capitalization: $1.27 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Ziff Davis’s Q3 Earnings Call
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Robert Coolbrith (Evercore ISI) asked about the timing and breadth of the strategic review. CEO Vivek Shah responded that increased segment-level disclosures attracted new interest and the disconnect between market and intrinsic value prompted the review, with all divisions under consideration for potential transactions.
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Cory Carpenter (JPMorgan) questioned whether any business units were off-limits for divestiture and the company’s exposure to AI-driven search volatility. Shah replied that nothing is off the table, but most inbound interest has focused on individual divisions, and the company’s revenue exposure to AI search overviews is limited and stable.
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Shyam Patil (SIG) asked about management’s preference for selling entire businesses versus segments and the future use of capital from any such deals. Shah said the main priority is maximizing per-share value, with flexibility to pursue sales, investments, or spin-offs, and that capital allocation will balance buybacks and M&A.
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Ross Sandler (Barclays) inquired about advertising growth and AI’s impact on display revenue. Shah indicated that, unlike other publishers, Ziff Davis is less affected by AI search changes, especially in high-growth segments like Health & Wellness, while CFO Bret Richter noted subscription growth is expected to outpace advertising in the next quarter.
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Rishi Jaluria (RBC) asked about M&A strategy given Ziff Davis’ resilience to AI-related headwinds. Shah answered that the company will continue to acquire leadership brands and sees opportunities to buy smaller, dislocated properties, with share buybacks remaining a top capital deployment priority.
Catalysts in Upcoming Quarters
In coming quarters, StockStory analysts will closely track (1) updates from the ongoing strategic review, including any announcements of asset sales, spin-offs, or other transactions; (2) the pace of adoption and monetization for newly launched AI platforms in Health & Wellness and Gaming & Entertainment; and (3) the performance of new product launches in Connectivity, especially the uptake of Speedtest Certified and the forthcoming diagnostics tool. The sustainability of strong free cash flow and continued M&A activity will also be key watchpoints.
Ziff Davis currently trades at $32.03, down from $32.69 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members).
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