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, 2023.
“We have a positive and encouraging outlook on 2024 that reflects a return to healthy growth rates at the company,” said Vivek Shah, Chief Executive Officer of Ziff Davis. “At the same time, we are well-positioned to act with conviction and decisiveness in the M&A market to further grow our business.”
FOURTH QUARTER 2023 RESULTS
- Q4 2023 quarterly revenues decreased 1.7% to $389.9 million compared to $396.7 million for Q4 2022.
- Income from operations decreased 13.6% to $80.7 million compared to $93.5 million for Q4 2022.
- Net income from continuing operations(1) decreased 8.3% to $63.4 million compared to $69.2 million for Q4 2022.
- Net income(1) decreased 6.1% to $63.4 million compared to $67.5 million for Q4 2022.
- Net income per diluted share from continuing operations(1) decreased 5.8% to $1.29 in Q4 2023 compared to $1.37 for Q4 2022.
- Adjusted EBITDA(2) for the quarter decreased 0.4% to $167.6 million compared to $168.3 million for Q4 2022.
- Adjusted net income from continuing operations(2) increased 1.0% to $107.0 million compared to $106.0 million for Q4 2022.
- Adjusted net income per diluted share from continuing operations(1)(2) (or “Adjusted diluted EPS”) for the quarter increased 3.1% to $2.33 compared to $2.26 for Q4 2022.
- Net cash provided by operating activities from continuing and discontinued operations was $92.1 million in Q4 2023 compared to $43.2 million in Q4 2022. Free cash flow(2) was $65.9 million in Q4 2023 compared to $17.8 million in Q4 2022.
- Ziff Davis ended the quarter with approximately $905.6 million in cash, cash equivalents, and investments. No funds were deployed in Q4 2023 for current year acquisitions.
FULL YEAR 2023 RESULTS
- 2023 yearly revenues decreased 1.9% to $1.36 billion compared to $1.39 billion for 2022.
- Income from operations decreased 33.3% to $132.6 million compared to $198.9 million for 2022 partially due to the recognition of a $56.9 million goodwill impairment during 2023, which exceeded the recognition of a $27.4 million goodwill impairment during 2022.
- Net income from continuing operations(1) decreased 36.6% to $41.5 million compared to $65.5 million for 2022 primarily due to the recognition of a $56.9 million goodwill impairment during 2023, which exceeded the net impact of a $20.7 million goodwill impairment, net of tax, and a $7.7 million gain on extinguishment of debt, net of tax, both of which were recognized during 2022.
- Net income(1) decreased 35.0% to $41.5 million compared to $63.8 million for 2022.
- Net income per diluted share from continuing operations(1) decreased 36.0% to $0.89 in 2023 compared to $1.39 for 2022.
- Adjusted EBITDA(2) for the year decreased 4.9% to $482.3 million compared to $507.2 million for 2022.
- Adjusted net income from continuing operations(2) decreased 8.1% to $287.4 million compared to $312.6 million for 2022.
- Adjusted diluted EPS(1)(2) for the year decreased 6.9% to $6.19 compared to $6.65 for 2022.
- Net cash provided by operating activities was $320.0 million in 2023 compared to $336.4 million in 2022. Free cash flow(2) was $211.2 million in 2023 compared to $230.3 million in 2022.
- Ziff Davis deployed approximately $108.5 million related to share repurchases in 2023.
The following table reflects results for the three month and year ended December 31, 2023 and 2022, respectively (in millions, except per share amounts).
(Unaudited) |
Three months ended |
% Change |
Year ended December 31, |
% Change |
||
2023 |
2022 |
2023 |
2022 |
|||
Revenues |
|
|
|
|
|
|
Digital Media |
$317.9 |
$321.7 |
(1.2)% |
$1,072.8 |
$1,078.4 |
(0.5)% |
Cybersecurity and Martech |
$72.0 |
$75.0 |
(4.0)% |
$291.2 |
$312.6 |
(6.8)% |
Total revenues(3) |
$389.9 |
$396.7 |
(1.7)% |
$1,364.0 |
$1,391.0 |
(1.9)% |
Income from operations |
$80.7 |
$93.5 |
(13.6)% |
$132.6 |
$198.9 |
(33.3)% |
Operating income margin |
20.7% |
23.6% |
(2.9)% |
9.7% |
14.3% |
(4.6)% |
Net income from continuing operations |
$63.4 |
$69.2 |
(8.3)% |
$41.5 |
$65.5 |
(36.6)% |
Net income |
$63.4 |
$67.5 |
(6.1)% |
$41.5 |
$63.8 |
(35.0)% |
Net income per diluted sharefrom continuing operations(1) |
$1.29 |
$1.37 |
(5.8)% |
$0.89 |
$1.39 |
(36.0)% |
Adjusted EBITDA(2) |
$167.6 |
$168.3 |
(0.4)% |
$482.3 |
$507.2 |
(4.9)% |
Adjusted EBITDA margin(2) |
43.0% |
42.4% |
0.6% |
35.4% |
36.5% |
(1.1)% |
Adjusted net incomefrom continuing operations(2) |
$107.0 |
$106.0 |
1.0% |
$287.4 |
$312.6 |
(8.1)% |
Adjusted diluted EPS from continuing operations(1)(2) |
$2.33 |
$2.26 |
3.1% |
$6.19 |
$6.65 |
(6.9)% |
Net cash provided by operating activities from continuing and discontinued operations |
$92.1 |
$43.2 |
n/m |
$320.0 |
$336.4 |
(4.9)% |
Free cash flow from continuing and discontinued operations(2) |
$65.9 |
$17.8 |
n/m |
$211.2 |
$230.3 |
(8.3)% |
Notes:
(1) |
|
GAAP effective tax rates were approximately 17.0% and 27.0% for the three months ended December 31, 2023 and 2022, respectively, and 32.2% and 44.2% for the year ended December 31, 2023 and 2022, respectively. Adjusted effective tax rates were approximately 22.5% and 23.2% for the three months ended December 31, 2023 and 2022, respectively, and 23.3% and 22.9% for the year ended December 31, 2023 and 2022, respectively. |
(2) |
|
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 report. |
(3) |
|
The revenues associated with each of the businesses may not foot precisely since each is presented independently. |
ZIFF DAVIS GUIDANCE
The Company’s full year 2024 outlook is as follows (in millions, except per share data):
|
2023 Actual |
|
2024 Range of Estimates |
|
Growth |
|||||||||
|
(unaudited) |
|
Low |
|
High |
|
Low |
|
High |
|||||
Revenue |
$ |
1,364.0 |
|
$ |
1,411.0 |
|
$ |
1,471.0 |
|
3.4 |
% |
|
7.8 |
% |
Adjusted EBITDA |
$ |
482.3 |
|
$ |
500.0 |
|
$ |
521.0 |
|
3.7 |
% |
|
8.0 |
% |
Adjusted diluted EPS* |
$ |
6.19 |
|
$ |
6.43 |
|
$ |
6.77 |
|
3.9 |
% |
|
9.4 |
% |
* Adjusted diluted EPS for 2024 excludes amortization of acquired intangibles and the impact of any currently unanticipated items, in each case net of tax. It is anticipated that the Adjusted effective tax rate for 2024 will be between 23.25% and 25.25%. |
A reconciliation of forward-looking Adjusted EBITDA and Adjusted diluted EPS to the corresponding GAAP guidance financial measures is not available without unreasonable effort due, primarily, to variability and difficulty in making accurate forecasts and projections of non-operating matters that may arise in the future.
Earnings Conference Call and Audio Webcast
Ziff Davis will host a live audio webcast and conference call discussing its fourth quarter and year-end 2023 financial results on Thursday, February 22, 2024, 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, connectivity, health, 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 regarding the Company’s expected fiscal 2024 financial performance. 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; subscriber 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 or 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, inflationary conditions, and rising interest rates; the risk of liability for legal and other claims; 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 in the “Ziff Davis Guidance” portion regarding the Company’s expected fiscal 2024 financial performance 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, |
||||||
|
|
2023 |
|
|
|
2022 |
|
ASSETS |
|
|
|
||||
Cash and cash equivalents |
$ |
737,612 |
|
|
$ |
652,793 |
|
Short-term investments |
|
27,109 |
|
|
|
58,421 |
|
Accounts receivable, net of allowances of $6,871 and $6,868, respectively |
|
337,703 |
|
|
|
304,739 |
|
Prepaid expenses and other current assets |
|
88,570 |
|
|
|
68,319 |
|
Total current assets |
|
1,190,994 |
|
|
|
1,084,272 |
|
Long-term investments |
|
140,906 |
|
|
|
127,871 |
|
Property and equipment, net of accumulated depreciation of $327,015 and $255,586, respectively |
|
188,169 |
|
|
|
178,184 |
|
Intangible assets, net |
|
325,406 |
|
|
|
462,815 |
|
Goodwill |
|
1,546,065 |
|
|
|
1,591,474 |
|
Deferred income taxes |
|
8,731 |
|
|
|
8,523 |
|
Other assets |
|
70,751 |
|
|
|
80,131 |
|
TOTAL ASSETS |
$ |
3,471,022 |
|
|
$ |
3,533,270 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Accounts payable |
$ |
123,256 |
|
|
$ |
120,829 |
|
Accrued employee related costs |
|
50,068 |
|
|
|
42,178 |
|
Other accrued liabilities |
|
43,612 |
|
|
|
39,539 |
|
Income taxes payable, current |
|
14,458 |
|
|
|
19,712 |
|
Deferred revenue, current |
|
184,549 |
|
|
|
187,904 |
|
Other current liabilities |
|
15,890 |
|
|
|
22,286 |
|
Total current liabilities |
|
431,833 |
|
|
|
432,448 |
|
Long-term debt |
|
1,001,312 |
|
|
|
999,053 |
|
Deferred revenue, noncurrent |
|
8,169 |
|
|
|
9,103 |
|
Deferred income taxes |
|
45,503 |
|
|
|
79,007 |
|
Income taxes payable, noncurrent |
|
8,486 |
|
|
|
11,675 |
|
Other long-term liabilities |
|
82,721 |
|
|
|
109,373 |
|
TOTAL LIABILITIES |
|
1,578,024 |
|
|
|
1,640,659 |
|
|
|
|
|
||||
Common stock |
|
461 |
|
|
|
473 |
|
Additional paid-in capital |
|
472,201 |
|
|
|
439,681 |
|
Retained earnings |
|
1,491,956 |
|
|
|
1,537,830 |
|
Accumulated other comprehensive loss |
|
(71,620 |
) |
|
|
(85,373 |
) |
TOTAL STOCKHOLDERS’ EQUITY |
|
1,892,998 |
|
|
|
1,892,611 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
3,471,022 |
|
|
$ |
3,533,270 |
ZIFF DAVIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED, IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA) |
|||||||||||||||
|
Three months ended December 31, |
|
Year ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Total revenues |
$ |
389,885 |
|
|
$ |
396,700 |
|
|
$ |
1,364,028 |
|
|
$ |
1,390,997 |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
||||||||
Direct costs |
|
48,615 |
|
|
|
50,847 |
|
|
|
197,292 |
|
|
|
195,554 |
|
Sales and marketing |
|
126,449 |
|
|
|
129,764 |
|
|
|
487,365 |
|
|
|
490,777 |
|
Research, development, and engineering |
|
15,532 |
|
|
|
18,210 |
|
|
|
68,860 |
|
|
|
74,093 |
|
General, administrative, and other related costs |
|
118,569 |
|
|
|
104,421 |
|
|
|
421,050 |
|
|
|
404,263 |
|
Goodwill impairment on business |
|
— |
|
|
|
— |
|
|
|
56,850 |
|
|
|
27,369 |
|
Total operating costs and expenses |
|
309,165 |
|
|
|
303,242 |
|
|
|
1,231,417 |
|
|
|
1,192,056 |
|
Income from operations |
|
80,720 |
|
|
|
93,458 |
|
|
|
132,611 |
|
|
|
198,941 |
|
Interest expense, net |
|
(2,251 |
) |
|
|
(5,423 |
) |
|
|
(20,031 |
) |
|
|
(33,842 |
) |
Gain on debt extinguishment, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
11,505 |
|
Gain (loss) on investments, net |
|
— |
|
|
|
1,029 |
|
|
|
357 |
|
|
|
(46,743 |
) |
Unrealized gain (loss) on short-term investments held at the reporting date, net |
|
1,065 |
|
|
|
7,020 |
|
|
|
(28,495 |
) |
|
|
(7,145 |
) |
Other (loss) income, net |
|
(3,486 |
) |
|
|
(4,525 |
) |
|
|
(9,468 |
) |
|
|
8,437 |
|
Income from continuing operations before income taxes and income (loss) from equity method investment, net |
|
76,048 |
|
|
|
91,559 |
|
|
|
74,974 |
|
|
|
131,153 |
|
Income tax expense |
|
(12,962 |
) |
|
|
(24,726 |
) |
|
|
(24,142 |
) |
|
|
(57,957 |
) |
Income (loss) from equity method investment, net of income taxes |
|
336 |
|
|
|
2,347 |
|
|
|
(9,329 |
) |
|
|
(7,730 |
) |
Net income from continuing operations |
|
63,422 |
|
|
|
69,180 |
|
|
|
41,503 |
|
|
|
65,466 |
|
Loss from discontinued operations, net of income taxes |
|
— |
|
|
|
(1,709 |
) |
|
|
— |
|
|
|
(1,709 |
) |
Net income |
$ |
63,422 |
|
|
$ |
67,471 |
|
|
$ |
41,503 |
|
|
$ |
63,757 |
|
|
|
|
|
|
|
|
|
||||||||
Net income per common share from continuing operations: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
1.39 |
|
|
$ |
1.47 |
|
|
$ |
0.89 |
|
|
$ |
1.39 |
|
Diluted |
$ |
1.29 |
|
|
$ |
1.37 |
|
|
$ |
0.89 |
|
|
$ |
1.39 |
|
Net loss per common share from discontinued operations: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
— |
|
|
$ |
(0.04 |
) |
|
$ |
— |
|
|
$ |
(0.04 |
) |
Diluted |
$ |
— |
|
|
$ |
(0.03 |
) |
|
$ |
— |
|
|
$ |
(0.04 |
) |
Net income per common share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
1.39 |
|
|
$ |
1.44 |
|
|
$ |
0.89 |
|
|
$ |
1.36 |
|
Diluted |
$ |
1.29 |
|
|
$ |
1.34 |
|
|
$ |
0.89 |
|
|
$ |
1.36 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
45,772,689 |
|
|
|
46,915,647 |
|
|
|
46,400,941 |
|
|
|
46,954,558 |
|
Diluted |
|
50,985,086 |
|
|
|
52,114,995 |
|
|
|
46,464,261 |
|
|
47,025,849 |
ZIFF DAVIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED, IN THOUSANDS) |
|||||||
|
Year ended December 31, |
||||||
|
|
2023 |
|
|
|
2022 |
|
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
41,503 |
|
|
$ |
63,757 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
236,966 |
|
|
|
233,400 |
|
Non-cash operating lease costs |
|
11,141 |
|
|
|
13,412 |
|
Share-based compensation |
|
31,920 |
|
|
|
26,601 |
|
Provision for credit losses (benefit) on accounts receivable |
|
2,809 |
|
|
|
(255 |
) |
Deferred income taxes, net |
|
(30,017 |
) |
|
|
(12,991 |
) |
Gain on extinguishment of debt, net |
|
— |
|
|
|
(11,505 |
) |
Goodwill impairment on business |
|
56,850 |
|
|
|
27,369 |
|
Changes in fair value of contingent consideration |
|
(200 |
) |
|
|
(2,575 |
) |
Loss from equity method investments |
|
9,329 |
|
|
|
7,730 |
|
Unrealized loss on short-term investments held at the reporting date |
|
28,495 |
|
|
|
7,145 |
|
(Gain) loss on investment, net |
|
(357 |
) |
|
|
46,743 |
|
Other |
|
5,159 |
|
|
|
3,637 |
|
Decrease (increase) in: |
|
|
|
||||
Accounts receivable |
|
(35,371 |
) |
|
|
14,948 |
|
Prepaid expenses and other current assets |
|
(8,700 |
) |
|
|
9,665 |
|
Other assets |
|
(5,574 |
) |
|
|
(16,240 |
) |
Increase (decrease) in: |
|
|
|
||||
Accounts payable |
|
9,419 |
|
|
|
(20,246 |
) |
Deferred revenue |
|
(6,802 |
) |
|
|
(20,962 |
) |
Accrued liabilities and other current liabilities |
|
(26,608 |
) |
|
|
(33,189 |
) |
Net cash provided by operating activities |
|
319,962 |
|
|
|
336,444 |
|
Cash flows from investing activities: |
|
|
|
||||
Purchases of property and equipment |
|
(108,729 |
) |
|
|
(106,154 |
) |
Acquisition of businesses, net of cash received |
|
(9,492 |
) |
|
|
(104,094 |
) |
Investment in available-for-sale securities |
|
— |
|
|
|
(15,000 |
) |
Purchase of equity investments |
|
(11,858 |
) |
|
|
— |
|
Proceeds from sale of equity investments |
|
3,174 |
|
|
|
4,527 |
|
Other |
|
(503 |
) |
|
|
(50 |
) |
Net cash used in investing activities |
|
(127,408 |
) |
|
|
(220,771 |
) |
Cash flows from financing activities: |
|
|
|
||||
Payment of debt |
|
— |
|
|
|
(166,904 |
) |
Proceeds from term loan |
|
— |
|
|
|
112,286 |
|
Debt extinguishment costs |
|
— |
|
|
|
(756 |
) |
Repurchase of common stock |
|
(108,527 |
) |
|
|
(78,291 |
) |
Issuance of common stock under employee stock purchase plan |
|
8,727 |
|
|
|
9,431 |
|
Proceeds from exercise of stock options |
|
— |
|
|
|
148 |
|
Deferred payments for acquisitions |
|
(15,241 |
) |
|
|
(16,116 |
) |
Other |
|
250 |
|
|
|
(630 |
) |
Net cash used in financing activities |
|
(114,791 |
) |
|
|
(140,832 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
7,056 |
|
|
|
(16,890 |
) |
Net change in cash and cash equivalents |
|
84,819 |
|
|
|
(42,049 |
) |
Cash and cash equivalents at beginning of year |
|
652,793 |
|
|
|
694,842 |
|
Cash and cash equivalents at end of year |
$ |
737,612 |
|
|
$ |
652,793 |
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) or Adjusted net income (loss) from continuing operations, Adjusted net income (loss) per diluted share or Adjusted net income (loss) per diluted share from continuing operations, 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 a 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 and (2) they are used by our institutional investors and 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 excluding these items 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) or Net income (loss) from continuing operations with adjustments to reflect the addition or elimination of certain items including:
- Interest expense, net. Interest expense is generated primarily from interest due on outstanding debt, partially offset by interest income generated from the interest earned on cash, cash equivalents, and investments;
- (Gain) loss on debt extinguishment, net. This is a non-cash expense that relates to a non-cash debt-for-equity exchange effectuated to settle amounts of senior secured term loans of the Company under its Credit Agreement with common stock of Consensus Cloud Solutions, Inc. (“Consensus”) owned by the Company. We believe this (gain) loss does not represent recurring core business operating results of the Company;
- (Gain) loss on sale of business. This gain or loss relates to the sales of businesses and does not represent recurring core business operating results of the Company;
- Unrealized (gain) loss on short-term investments held at the reporting date, net. This is a non-cash item as it relates to the change in the carrying value of our investment in Consensus depending on the share price of Consensus common stock and does not represent core business operating results of the Company;
- (Gain) loss on investments, net. This item relates to the disposition of a portion of our investment in Consensus. The amount of gain or loss depends on the share price of Consensus common stock and does not represent core business operating results of the Company;
- Other (income) expense, net. This income or expense relates to other non-operating items and does not represent recurring core business operating results of the Company;
- Income tax (benefit) expense. This benefit or expense depends on the pre-tax loss or income of the Company, statutory tax rates, tax regulations and different tax rates in various jurisdictions in which the Company operates and which the Company does not have the control over;
- (Income) loss from equity method investments, net. This is a non-cash expense as it relates to our investment in OCV Fund I, LP (the “Fund”). We believe that gain or loss resulting from our equity method investment does not represent core business operating results of the Company;
- Depreciation and amortization. This is a non-cash expense as it relates to use and associated reduction in value of certain assets including equipment, fixtures, and certain capitalized internal-used software and website development costs, and identifiable definite-lived intangible assets of the acquired businesses. This also includes the reduction in value of certain acquired intangible assets that represent the cost incurred by the acquiree to build value prior to the acquisition and the amortization of this cost does not represent core business operating results of the Company;
- Share-based compensation. This is a non-cash expense as it relates to awards granted under the various share-based incentive plans of the Company. We view the economic cost of share-based awards to be the dilution to our share base;
- Acquisition, integration, and other costs, including adjustments to contingent consideration, lease terminations, retention bonuses, other acquisition-specific items, and other costs, such as severance and legal settlements. These expenses do not represent core business operating results of the Company;
- Disposal related costs associated with disposal of certain businesses. These are expenses associated with the disposal of certain businesses that do not represent core business operating results of the Company;
- Lease asset impairments and other charges. These expenses are incurred in connection with impaired right-of-use (“ROU”) assets of the Company.
Contacts
Alan Steier
Investor Relations
Ziff Davis, Inc.
investor@ziffdavis.com
Rebecca Wright
Corporate Communications
Ziff Davis, Inc.
press@ziffdavis.com