NEW YORK–(BUSINESS WIRE)–Ziff Davis, Inc. (NASDAQ: ZD) (“Ziff Davis”) today reported unaudited financial results for the third quarter ended September 30, 2022.
“Against a backdrop of global economic uncertainty and pressures, as well as strong headwinds in the advertising market, we were able to once again deliver healthy bottom-line growth,” said Vivek Shah, Chief Executive Officer of Ziff Davis. “This speaks to the resiliency and discipline of our hardworking and dedicated employees worldwide.”
THIRD QUARTER 2022 RESULTS
On October 7, 2021, Ziff Davis completed the spin-off of its Consensus Cloud Solutions, Inc. (“Consensus”) business. Ziff Davis has classified Consensus as a discontinued operation in its financial statements for the three and nine months ended September 30, 2021 results. Historical results in this press release represent continuing operations, except for the Statement of Cash Flows, net cash provided by operating activities and free cash flow during the three and nine months ended September 30, 2021, which are on a combined continuing and discontinued operations basis.
Q3 2022 quarterly revenues decreased 3.7% to $341.9 million compared to $355.1 million for Q3 2021. On a pro-forma(1) basis, Q3 2022 quarterly revenues decreased 1.1% to $341.9 million as compared to $345.6 million for Q3 2021.
GAAP net income from continuing operations increased to $18.2 million compared to $6.8 million for Q3 2021 primarily due to a gain on the repurchase of 4.625% Senior Notes, less interest expense due to lower debt in connection with debt repurchases and an unrealized gain on our investment in Consensus less an impairment of a business recognized during the three months ended September 30, 2022. In addition, the Company recognized a loss on the sale of the B2B Backup business unit of $19.2 million, net of tax in the prior period that did not recur.
Adjusted non-GAAP net income from continuing operations increased by 6.0% to $74.3 million as compared to $70.1 million for Q3 2021. On a pro-forma(1) basis, Adjusted non-GAAP net income from continuing operations increased by 12.4% to $74.3 million as compared to $66.1 million for Q3 2021.
GAAP net income per diluted share from continuing operations(2) increased to $0.39 in Q3 2022 compared to $0.14 for Q3 2021.
Adjusted non-GAAP net income per diluted share from continuing operations(2)(3) for the quarter increased 6.0% to $1.58 as compared to $1.49 for Q3 2021. On a pro-forma(1) basis, Adjusted non-GAAP net income per diluted share from continuing operations(2)(3) for the quarter increased 12.9% to $1.58 compared to $1.40 for Q3 2021.
Adjusted EBITDA(4) for the quarter increased 0.3% to $120.1 million compared to $119.7 million for Q3 2021. On a pro-forma(1) basis, Adjusted EBITDA(4) for the quarter increased 4.2% to $120.1 million compared to $115.3 million for Q3 2021.
Net cash provided by operating activities from continuing operations was $100.7 million in Q3 2022. Free cash flow from continuing operations(6) was $73.8 million in Q3 2022.
Ziff Davis ended the quarter with approximately $801.0 million in cash, cash equivalents, and investments after deploying during the quarter approximately $19.3 million for current and prior year acquisitions and approximately $94.1 million to repay $105.1 million of outstanding principal of its senior notes.
Key unaudited financial results for Q3 2022 versus Q3 2021 are set forth in the following table (in millions, except per share amounts). Reconciliations of Adjusted non-GAAP net income per diluted share from continuing operations, Adjusted EBITDA and Free cash flow from continuing operations to their nearest comparable GAAP financial measures are presented in the attached schedules.
The following table reflects Actual and Pro-Forma Results from Continuing Operations for the third quarter of 2022 and 2021 (in millions, except per share amounts). Pro-Forma Results from Continuing Operations below excludes the operating results from the Company’s B2B Backup business that was sold in the third quarter of 2021.
|
|
Actual Results |
Pro-Forma Results(1) |
||||
|
|
Three months ended September 30, |
Three months ended September 30, |
||||
|
2022 |
2021 |
% Change |
2022 |
2021 |
% Change |
|
|
Revenues |
|
|
|
|
|
|
|
Digital Media |
$263.7 |
$262.2 |
0.6% |
$263.7 |
$262.2 |
0.6% |
|
Cybersecurity and Martech |
$78.2 |
$92.9 |
(15.8)% |
$78.2 |
$83.4 |
(6.2)% |
|
Total revenue(5) |
$341.9 |
$355.1 |
(3.7)% |
$341.9 |
$345.6 |
(1.1)% |
|
Income from operations |
$29.0 |
$45.0 |
(35.6)% |
|
|
|
|
GAAP income per diluted share from continuing operations(2) |
$0.39 |
$0.14 |
178.6% |
|
|
|
|
Adjusted non-GAAP income per diluted share from continuing operations(2) (3) |
$1.58 |
$1.49 |
6.0% |
$1.58 |
$1.40 |
12.9% |
|
GAAP net income from continuing operations |
$18.2 |
$6.8 |
167.6% |
|
|
|
|
Adjusted non-GAAP net income from continuing operations |
$74.3 |
$70.1 |
6.0% |
$74.3 |
$66.1 |
12.4% |
|
Adjusted EBITDA(4) |
$120.1 |
$119.7 |
0.3% |
$120.1 |
$115.3 |
4.2% |
|
Adjusted EBITDA margin(4) |
35.1% |
33.7% |
1.4% |
35.1% |
33.4% |
1.7% |
|
Net cash provided by operating activities from continuing operations(6) |
$100.7 |
NA (7) |
|
|
|
|
|
Free cash flow from continuing operations(6) |
$73.8 |
NA (7) |
|
|
|
|
The following table reflects Actual and Pro-Forma Results from Continuing Operations for the nine months ended September 30, 2022 and 2021 (in millions, except per share amounts). Pro-Forma Results from Continuing Operations below excludes the operating results from Voice assets in the United Kingdom and the Company’s B2B Backup business that were sold in 2021.
|
|
Actual Results |
Pro-Forma Results(1) |
||||
|
Nine months ended September 30, |
Nine months ended September 30, |
|||||
|
|
2022 |
2021 |
% Change |
2022 |
2021 |
% Change |
|
Revenues |
|
|
|
|
|
|
|
Digital Media |
$756.7 |
$742.7 |
1.9% |
$756.7 |
$742.7 |
1.9% |
|
Cybersecurity and Martech |
$237.6 |
$265.4 |
(10.5)% |
$237.6 |
$231.9 |
2.5% |
|
Total revenue(5) |
$994.3 |
$1,008.1 |
(1.4)% |
$994.3 |
$974.6 |
2.0% |
|
Income from operations |
$105.5 |
$81.9 |
28.8% |
|
|
|
|
GAAP (loss) income per diluted share from continuing operations(2) |
$(0.08) |
$0.47 |
(117.0)% |
|
|
|
|
Adjusted non-GAAP income per diluted share from continuing operations(2) (3) |
$4.41 |
$4.23 |
4.3% |
$4.41 |
$4.00 |
10.3% |
|
GAAP net (loss) income from continuing operations |
$(3.7) |
$22.5 |
(116.4)% |
|
|
|
|
Adjusted non-GAAP net income from continuing operations |
$206.6 |
$192.6 |
7.3% |
$206.6 |
$182.4 |
13.3% |
|
Adjusted EBITDA(4) |
$338.9 |
$337.4 |
0.4% |
$338.9 |
$323.3 |
4.8% |
|
Adjusted EBITDA margin(4) |
34.1% |
33.5% |
0.6% |
34.1% |
33.2% |
0.9% |
|
Net cash provided by operating activities from continuing operations(6) |
$293.2 |
NA (7) |
|
|
|
|
|
Free cash flow from continuing operations(6) |
$212.5 |
NA (7) |
|
|
|
|
ZIFF DAVIS GUIDANCE
The Company is revising its guidance for Revenue, Adjusted EBITDA and Adjusted non-GAAP diluted EPS for the fiscal year 2022 as follows (in millions, except per share data):
|
|
Current Guidance |
|
Revised FY 2022 Range of Estimates |
||||||||
|
|
Low |
|
High |
|
Low |
|
High |
||||
|
Revenue |
$ |
1,410 |
|
$ |
1,435 |
|
$ |
1,390 |
|
$ |
1,400 |
|
Adjusted EBITDA |
$ |
507 |
|
$ |
519 |
|
$ |
507 |
|
$ |
513 |
|
Adjusted non-GAAP diluted EPS* |
$ |
6.57 |
|
$ |
6.77 |
|
$ |
6.70 |
|
$ |
6.80 |
|
_______________ |
|
* Adjusted non-GAAP diluted EPS for 2022 excludes share-based compensation of between $24 million and $28 million, amortization of acquired intangibles and the impact of any currently unanticipated items, in each case net of tax. It is anticipated that the non-GAAP effective tax rate for 2022 (exclusive of the release of reserves for uncertain tax positions) will be between 22.25% and 23.75%. |
The Company has not reconciled the non-GAAP Business Outlook for 2022 Adjusted EBITDA or Adjusted non-GAAP income per diluted share from continuing operations and the associated tax rate information included in this press release to the most directly comparable GAAP measure because this cannot be done without unreasonable effort due to the variability with respect to costs related to acquisitions and taxation, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable and significant impact on our future non-GAAP financial results.
Notes:
|
(1) |
|
Pro-forma figures are provided taking into consideration the sale of certain Voice assets in the United Kingdom as well as the sale of the Company’s B2B Backup business as if they had occurred January 1, 2021. |
|
(2) |
|
The estimated GAAP effective tax rates were approximately 45.9% and (44.2)% for the three months ended September 30, 2022 and 2021, respectively, and 83.9% and 142.3% for the nine months ended September 30, 2022 and 2021, respectively. The estimated Adjusted non-GAAP effective tax rates were approximately 22.6% and 25.2% for the three months ended September 30, 2022 and 2021, respectively, and 22.8% and 23.3% for the nine months ended September 30, 2022 and 2021, respectively. |
|
(3) |
|
Adjusted non-GAAP net income per diluted share or Adjusted non-GAAP diluted EPS excludes certain non-GAAP items, as defined in the Reconciliation of GAAP to Adjusted non-GAAP financial measures. For the three months ended September 30, 2022 and 2021, excluded non-GAAP items totaled $1.19 and $1.35 per diluted share, respectively. For the nine months ended September 30, 2022 and 2021, excluded non-GAAP items totaled $4.49 and $3.76 per diluted share, respectively. |
|
(4) |
|
Adjusted EBITDA is defined as net income from continuing operations before interest; gain on sale of businesses; loss on investments, net, unrealized gain (loss) on short-term investments held at the reporting date, other income (expense), net; income tax (expense) benefit; (loss) income from equity method investments, net; depreciation and amortization; and the items used to reconcile GAAP to Adjusted non-GAAP financial measures, as defined in the Reconciliation of GAAP to Adjusted non-GAAP financial measures. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Revenue. Adjusted EBITDA and Adjusted EBITDA margin amounts are not meant as a substitute for financial information prepared in accordance with GAAP, but are solely for informational purposes. |
|
(5) |
|
The revenues associated with each of the businesses may not foot precisely since each is presented independently. |
|
(6) |
|
Free cash flow from continuing operations is defined as net cash provided by operating activities from continuing operations, less purchases of property and equipment from continuing operations, plus contingent consideration from continuing operations. Free cash flow from continuing operations amounts are not meant as a substitute for GAAP, but are solely for informational purposes. There were no discontinued operations in 2022. |
|
(7) |
|
NA = Not available. The Company has not prepared net cash provided by operating activities from continuing operations and free cash flow from continuing operations for the three and nine months ended September 30, 2021. Net cash provided by operating activities from continuing and discontinued operations on a combined basis and Free cash flow from continuing and discontinued operations on a combined basis for the three months ended September 30, 2021 was $140.2 million and $110.5 million, respectively. Net cash provided by operating activities from continuing and discontinued operations on a combined basis and Free cash flow from continuing and discontinued operations on a combined basis for the nine months ended September 30, 2021 was $430.3 million and $343.4 million, respectively. Free cash flow from continuing and discontinued operations is defined as net cash provided by operating activities from continuing and discontinued operations, less purchases of property and equipment from continuing and discontinued operations, plus contingent consideration from continuing and discontinued operations. |
About Ziff Davis
Ziff Davis, Inc. (NASDAQ: ZD) is a vertically focused digital media and internet company whose portfolio includes leading brands in technology, entertainment, shopping, 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 “Business Outlook” portion regarding the Company’s expected fiscal 2022 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 revenues, profitability and cash flows; 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; 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 risk of liability for legal and other claims; and the numerous other factors set forth in Ziff Davis’ (formerly J2 Global, Inc.) filings with the Securities and Exchange Commission (“SEC”). For a more detailed description of the risk factors and uncertainties affecting Ziff Davis, refer to the 2021 Annual Report on Form 10-K filed by Ziff Davis on March 15, 2022, 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 “Business Outlook” portion regarding the Company’s expected fiscal 2022 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.
About 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 non-GAAP net income from continuing operations and Adjusted Pro-Forma net income from continuing operations, Adjusted non-GAAP net income per diluted share from continuing operations and Adjusted Pro-Forma net income per diluted share from continuing operations, Adjusted and Pro-Forma EBITDA, Adjusted EBITDA margin and Pro-Forma EBITDA margin, Free cash flow from continuing operations and Free cash flow from continuing and discontinued operations. 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 Adjusted non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. We believe that these Adjusted non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our recurring core business operating results. We believe that both management and investors benefit from referring to these Adjusted non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These Adjusted non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance and liquidity. We believe these Adjusted 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.
For more information on these Adjusted non-GAAP financial measures, please see the appropriate GAAP to Adjusted non-GAAP reconciliation tables that are presented in the attached schedules.
|
ZIFF DAVIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED, IN THOUSANDS) |
|||||||
|
|
September 30, 2022 |
|
December 31, 2021 |
||||
|
ASSETS |
|
|
|
||||
|
Cash and cash equivalents |
$ |
621,917 |
|
|
$ |
694,842 |
|
|
Short-term investments |
|
54,897 |
|
|
|
229,200 |
|
|
Accounts receivable, net of allowances |
|
232,297 |
|
|
|
316,342 |
|
|
Prepaid expenses and other current assets |
|
66,193 |
|
|
|
60,290 |
|
|
Total current assets |
|
975,304 |
|
|
|
1,300,674 |
|
|
Long-term investments |
|
124,228 |
|
|
|
122,593 |
|
|
Property and equipment, net |
|
171,181 |
|
|
|
161,209 |
|
|
Operating lease right-of-use assets |
|
44,257 |
|
|
|
55,617 |
|
|
Trade names, net |
|
142,044 |
|
|
|
147,761 |
|
|
Customer relationships, net |
|
227,126 |
|
|
|
275,451 |
|
|
Goodwill |
|
1,579,957 |
|
|
|
1,531,455 |
|
|
Other purchased intangibles, net |
|
129,282 |
|
|
|
149,513 |
|
|
Deferred income taxes, noncurrent |
|
7,636 |
|
|
|
5,917 |
|
|
Other assets |
|
32,053 |
|
|
|
20,090 |
|
|
TOTAL ASSETS |
$ |
3,433,068 |
|
|
$ |
3,770,280 |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
|
Accounts payable and accrued expenses |
$ |
212,926 |
|
|
$ |
229,772 |
|
|
Deferred revenue, current |
|
180,136 |
|
|
|
185,571 |
|
|
Operating lease liabilities, current |
|
23,171 |
|
|
|
27,156 |
|
|
Current portion of long-term debt |
|
— |
|
|
|
54,609 |
|
|
Other current liabilities |
|
222 |
|
|
|
130 |
|
|
Total current liabilities |
|
416,455 |
|
|
|
497,238 |
|
|
Long-term debt |
|
998,499 |
|
|
|
1,036,018 |
|
|
Deferred revenue, noncurrent |
|
8,742 |
|
|
|
14,839 |
|
|
Operating lease liabilities, noncurrent |
|
38,334 |
|
|
|
53,708 |
|
|
Income taxes payable, noncurrent |
|
11,675 |
|
|
|
11,675 |
|
|
Liability for uncertain tax positions |
|
45,439 |
|
|
|
42,546 |
|
|
Deferred income taxes |
|
83,038 |
|
|
|
108,982 |
|
|
Other long-term liabilities |
|
37,241 |
|
|
|
37,542 |
|
|
TOTAL LIABILITIES |
|
1,639,423 |
|
|
|
1,802,548 |
|
|
Commitments and contingencies |
|
|
|
||||
|
Preferred stock |
|
— |
|
|
|
— |
|
|
Common stock |
|
472 |
|
|
|
474 |
|
|
Additional paid-in capital |
|
432,272 |
|
|
|
509,122 |
|
|
Retained earnings |
|
1,469,519 |
|
|
|
1,515,358 |
|
|
Accumulated other comprehensive loss |
|
(108,618 |
) |
|
|
(57,222 |
) |
|
TOTAL STOCKHOLDERS’ EQUITY |
|
1,793,645 |
|
|
|
1,967,732 |
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
3,433,068 |
|
|
$ |
3,770,280 |
|
|
ZIFF DAVIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED, IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA) |
|||||||||||||||
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
Total revenues |
$ |
341,873 |
|
|
$ |
355,144 |
|
|
$ |
994,297 |
|
|
$ |
1,008,094 |
|
|
Cost of revenues (1) |
|
52,603 |
|
|
|
49,698 |
|
|
|
144,707 |
|
|
|
142,335 |
|
|
Gross profit |
|
289,270 |
|
|
|
305,446 |
|
|
|
849,590 |
|
|
|
865,759 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
|
Sales and marketing (1) |
|
119,474 |
|
|
|
126,577 |
|
|
|
361,013 |
|
|
|
354,949 |
|
|
Research, development and engineering (1) |
|
17,735 |
|
|
|
19,619 |
|
|
|
55,883 |
|
|
|
56,999 |
|
|
General and administrative (1) |
|
95,658 |
|
|
|
114,240 |
|
|
|
299,842 |
|
|
|
339,236 |
|
|
Goodwill impairment on business |
|
27,369 |
|
|
|
— |
|
|
|
27,369 |
|
|
|
32,629 |
|
|
Total operating expenses |
|
260,236 |
|
|
|
260,436 |
|
|
|
744,107 |
|
|
|
783,813 |
|
|
Income from operations |
|
29,034 |
|
|
|
45,010 |
|
|
|
105,483 |
|
|
|
81,946 |
|
|
Interest expense, net |
|
(8,560 |
) |
|
|
(14,490 |
) |
|
|
(28,419 |
) |
|
|
(56,980 |
) |
|
Gain on debt extinguishment, net |
|
10,112 |
|
|
|
— |
|
|
|
11,505 |
|
|
|
— |
|
|
Loss on sale of businesses, net |
|
— |
|
|
|
(24,600 |
) |
|
|
— |
|
|
|
(21,798 |
) |
|
Gain (loss) on investments, net |
|
471 |
|
|
|
— |
|
|
|
(47,772 |
) |
|
|
(16,677 |
) |
|
Unrealized gain (loss) on short-term investments held at the reporting date, net |
|
4,201 |
|
|
|
— |
|
|
|
(14,165 |
) |
|
|
— |
|
|
Other income (loss), net |
|
4,218 |
|
|
|
107 |
|
|
|
12,962 |
|
|
|
(466 |
) |
|
Income (loss) from continuing operations before income taxes and (loss) income from equity method investment, net |
|
39,476 |
|
|
|
6,027 |
|
|
|
39,594 |
|
|
|
(13,975 |
) |
|
Income tax (expense) benefit |
|
(18,100 |
) |
|
|
2,665 |
|
|
|
(33,231 |
) |
|
|
19,883 |
|
|
(Loss) income from equity method investment, net |
|
(3,191 |
) |
|
|
(1,923 |
) |
|
|
(10,077 |
) |
|
|
16,596 |
|
|
Net income (loss) from continuing operations |
|
18,185 |
|
|
|
6,769 |
|
|
|
(3,714 |
) |
|
|
22,504 |
|
|
Income from discontinued operations, net of income taxes |
|
— |
|
|
|
35,800 |
|
|
|
— |
|
|
|
113,705 |
|
|
Net income (loss) |
$ |
18,185 |
|
|
$ |
42,569 |
|
|
$ |
(3,714 |
) |
|
$ |
136,209 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net income (loss) per common share from continuing operations: |
|
|
|
|
|
|
|
||||||||
|
Basic |
$ |
0.39 |
|
|
$ |
0.14 |
|
|
$ |
(0.08 |
) |
|
$ |
0.50 |
|
|
Diluted |
$ |
0.39 |
|
|
$ |
0.14 |
|
|
$ |
(0.08 |
) |
|
$ |
0.47 |
|
|
Net income per common share from discontinued operations: |
|
|
|
|
|
|
|
||||||||
|
Basic |
$ |
— |
|
|
$ |
0.77 |
|
|
$ |
— |
|
|
$ |
2.51 |
|
|
Diluted |
$ |
— |
|
|
$ |
0.74 |
|
|
$ |
— |
|
|
$ |
2.39 |
|
|
Net income (loss) per common share: |
|
|
|
|
|
|
|
||||||||
|
Basic |
$ |
0.39 |
|
|
$ |
0.91 |
|
|
$ |
(0.08 |
) |
|
$ |
3.01 |
|
|
Diluted |
$ |
0.39 |
|
|
$ |
0.88 |
|
|
$ |
(0.08 |
) |
|
$ |
2.86 |
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||||||
|
Basic |
|
46,871,897 |
|
|
|
46,738,073 |
|
|
|
46,967,671 |
|
|
|
45,258,819 |
|
|
Diluted |
|
46,871,897 |
|
|
|
48,582,585 |
|
|
|
46,967,671 |
|
|
|
47,565,062 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
(1) Includes share-based compensation expense as follows: |
|
|
|
|
|
|
|
||||||||
|
Cost of revenues |
$ |
63 |
|
|
$ |
70 |
|
|
$ |
289 |
|
|
$ |
220 |
|
|
Sales and marketing |
|
772 |
|
|
|
335 |
|
|
|
2,447 |
|
|
|
879 |
|
|
Research, development and engineering |
|
567 |
|
|
|
514 |
|
|
|
2,048 |
|
|
|
1,390 |
|
|
General and administrative |
|
4,984 |
|
|
|
5,484 |
|
|
|
16,022 |
|
|
|
15,513 |
|
|
Total |
$ |
6,386 |
|
|
$ |
6,403 |
|
|
$ |
20,806 |
|
|
$ |
18,002 |
|
|
ZIFF DAVIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED, IN THOUSANDS) |
|||||||
|
|
Nine months ended September 30, |
||||||
|
|
2022 |
|
2021 |
||||
|
Cash flows from operating activities: |
|
|
|
||||
|
Net (loss) income |
$ |
(3,714 |
) |
|
$ |
136,209 |
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
||||
|
Depreciation and amortization |
|
174,880 |
|
|
|
196,443 |
|
|
Amortization of financing costs and discounts |
|
2,051 |
|
|
|
21,295 |
|
|
Non-cash operating lease costs |
|
9,043 |
|
|
|
8,366 |
|
|
Share-based compensation |
|
20,806 |
|
|
|
19,119 |
|
|
Provision for credit losses on accounts receivable |
|
(1,142 |
) |
|
|
7,934 |
|
|
Deferred income taxes, net |
|
(13,552 |
) |
|
|
2,537 |
|
|
Gain on extinguishment of debt, net |
|
(11,505 |
) |
|
|
— |
|
|
Gain on sale of businesses |
|
— |
|
|
|
21,798 |
|
|
Goodwill impairment on business |
|
27,369 |
|
|
|
32,629 |
|
|
Changes in fair value of contingent consideration |
|
(2,305 |
) |
|
|
(567 |
) |
|
Loss (income) from equity method investments |
|
10,077 |
|
|
|
(16,596 |
) |
|
Unrealized gain (loss) on short-term investments held at the reporting date |
|
14,165 |
|
|
|
— |
|
|
Loss on investments, net |
|
47,772 |
|
|
|
16,677 |
|
|
Other |
|
269 |
|
|
|
9,591 |
|
|
Decrease (increase) in: |
|
|
|
||||
|
Accounts receivable |
|
85,121 |
|
|
|
49,888 |
|
|
Prepaid expenses and other current assets |
|
3,177 |
|
|
|
(10,610 |
) |
|
Operating lease right-of-use assets |
|
3,851 |
|
|
|
2,833 |
|
|
Other assets |
|
(12,518 |
) |
|
|
(2,378 |
) |
|
Increase (decrease) in: |
|
|
|
||||
|
Accounts payable and accrued expenses |
|
(24,974 |
) |
|
|
(1,409 |
) |
|
Income taxes payable |
|
13,529 |
|
|
|
(37,863 |
) |
|
Deferred revenue |
|
(25,400 |
) |
|
|
4,774 |
|
|
Operating lease liabilities |
|
(23,027 |
) |
|
|
(22,179 |
) |
|
Liability for uncertain tax positions |
|
2,893 |
|
|
|
(2,903 |
) |
|
Other long-term liabilities |
|
(3,647 |
) |
|
|
(5,336 |
) |
|
Net cash provided by operating activities |
|
293,219 |
|
|
|
430,252 |
|
|
Cash flows from investing activities: |
|
|
|
||||
|
Proceeds from sale of available-for-sale investments |
|
— |
|
|
|
663 |
|
|
Investment in available-for-sale securities |
|
(15,000 |
) |
|
|
— |
|
|
Distribution from equity method investment |
|
— |
|
|
|
15,327 |
|
|
Purchases of equity method investment |
|
— |
|
|
|
(22,249 |
) |
|
Purchases of equity investments |
|
— |
|
|
|
(999 |
) |
|
Purchases of property and equipment |
|
(80,767 |
) |
|
|
(87,495 |
) |
|
Acquisition of businesses, net of cash received |
|
(104,094 |
) |
|
|
(112,444 |
) |
|
Purchases of intangible assets |
|
— |
|
|
|
(1,255 |
) |
|
Proceeds from sale of businesses, net of cash divested |
|
— |
|
|
|
48,876 |
|
|
Net cash used in investing activities |
|
(199,861 |
) |
|
|
(159,576 |
) |
|
Cash flows from financing activities: |
|
|
|
||||
|
Payment of debt |
|
(166,904 |
) |
|
|
(402,414 |
) |
|
Proceeds from term loan |
|
112,286 |
|
|
|
— |
|
|
Debt extinguishment costs |
|
(756 |
) |
|
|
— |
|
|
Proceeds from bridge loan |
|
— |
|
|
|
485,000 |
|
|
Repurchase of common stock |
|
(76,545 |
) |
|
|
(29,855 |
) |
|
Issuance of common stock under employee stock purchase plan |
|
5,235 |
|
|
|
4,232 |
|
|
Exercise of stock options |
|
148 |
|
|
|
2,880 |
|
|
Deferred payments for acquisitions |
|
(14,734 |
) |
|
|
(13,387 |
) |
|
Other |
|
(559 |
) |
|
|
(6,619 |
) |
|
Net cash (used in) provided by financing activities |
|
(141,829 |
) |
|
|
39,837 |
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
(24,454 |
) |
|
|
(6,698 |
) |
|
Net change in cash and cash equivalents |
|
(72,925 |
) |
|
|
303,815 |
|
|
Cash and cash equivalents at beginning of period |
|
694,842 |
|
|
|
242,652 |
|
|
Cash and cash equivalents at beginning of period associated with discontinued operations |
|
— |
|
|
|
66,210 |
|
|
Cash and cash equivalents at beginning of period associated with continuing operations |
|
694,842 |
|
|
|
176,442 |
|
|
Cash and cash equivalents at end of period |
|
621,917 |
|
|
|
546,467 |
|
|
Cash and cash equivalents at end of period associated with discontinued operations |
|
— |
|
|
|
31,210 |
|
|
Cash and cash equivalents at end of period associated with continuing operations |
$ |
621,917 |
|
$ |
515,257 |
||
Contacts
Rebecca Wright
Ziff Davis, Inc.
800-577-1790
investor@ziffdavis.com
