Ziff Davis (ZD -2.81%), a digital media and internet technology company with operations in areas such as health, commerce, technology, and cybersecurity, reported its second-quarter results on August 6, 2025. The headline news: GAAP revenue jumped to $352.2 million, up 9.8% year over year and above analyst expectations, while adjusted diluted earnings per share (EPS) reached $1.24, beating the $1.19 non-GAAP consensus. However, GAAP net income declined by 28.6% compared to Q2 2024. The company maintained its full-year guidance, reflecting management’s confidence in the current momentum, though the quarter featured both standout performance in select business areas and ongoing challenges in others.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| Adjusted Diluted EPS (Non-GAAP) | $1.24 | $1.19 | $1.18 | 5.1 % |
| Revenue | $352.2 million | $338.23 million | $320.8 million | 9.8% |
| Adjusted EBITDA | $107.7 million | $96.3 million | 11.8% | |
| Free Cash Flow (Non-GAAP) | $26.9 million | $25.1 million | 7.2 % | |
| Net Income | $26.3 million | $36.9 million | (28.7 %) |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
About Ziff Davis: Business Model and Key Priorities
Ziff Davis is a diversified global digital media company. It operates in segments including Technology & Shopping, Gaming & Entertainment, Health & Wellness, Connectivity, and Cybersecurity & Martech. Its business depends on a mix of advertising, e-commerce, consumer subscriptions, and business software licensing.
The company’s strategy centers on acquisition-led growth and revenue diversification. Over the past decade, it has invested heavily in mergers and acquisitions, extending its reach across digital media, internet services, and technology platforms. This approach aims to balance its revenue streams, reduce dependence on a single segment or market, and help it adapt as industry trends shift. Key success factors include disciplined capital allocation, continued innovation, careful integration of acquired businesses, and strict compliance with evolving regulations around privacy and intellectual property.
Quarter Highlights: Segment Results, Profitability, and Strategic Activity
The quarter brought clear progress in several areas, with total GAAP revenue growth of 9.8% representing the company's fastest pace since 2021. The Health & Wellness segment stood out, delivering revenue growth of 15.7%, fueled by strong advertising demand from pharmaceutical advertisers and a rebound in provider marketing. Management stated that “breakthrough results” in Health & Wellness and Connectivity were key drivers.
Connectivity, which includes businesses such as Speedtest (an internet speed testing tool), Downdetector (service outage tracking), and Ekahau (Wi-Fi planning software), expanded revenue by 14.2%. The Technology & Shopping segment, home to brands like PCMag (consumer tech reviews and news), CNET Group (consumer tech media), and RetailMeNot (digital coupons and cashback deals), grew 11.3%. This growth was powered by both organic performance and contributions from recent acquisitions, despite ongoing investment in business-to-business product consolidation and a focus on profitable revenue streams.
Gaming & Entertainment, which spans properties such as IGN (video game and entertainment news) and the Humble Bundle (digital game deals and charity bundles), increased revenue by 7.5%. However, the Cybersecurity & Martech segment, offering security software and marketing technology tools, declined slightly in revenue for the second consecutive quarter, dropping 0.9%. While its profitability improved earlier in the year, the segment’s ongoing revenue softness was flagged by management as an area to watch, with hopes for a return to growth in the second half of FY2025.
Profitability trends were mixed. Adjusted EBITDA rose 11.8% to $107.7 million, buoyed by increased revenue. The adjusted EBITDA margin was 30.6% (non-GAAP), while Operating margin (GAAP) improved to 9.5%. On the downside, GAAP net income dropped by 28.6% due to higher interest expenses and greater non-cash charges like depreciation and amortization.
Free cash flow (non-GAAP) rose 7.5% versus Q2 2024. However, over the first half of the year (6M 2025), free cash flow (non-GAAP) declined sharply, reflecting swings in working capital requirements, upfront costs from recent acquisitions, and heavier capital expenditures. On capital allocation, Ziff Davis spent $11.4 million on new acquisitions and $33.9 million on share repurchases, continuing its active buyback program.
In intellectual property, the company continued to highlight its legal efforts to protect its copyrighted content, pointing to a lawsuit against OpenAI regarding unauthorized use of its material. This focus on IP underscores the broader importance of digital rights and regulatory compliance for the company's long-term prospects.
Looking Forward: Guidance and Investor Considerations
Management reaffirmed its full-year 2025 outlook following the quarter, targeting GAAP revenue between $1.44 billion and $1.50 billion, adjusted EBITDA guidance of $505 million to $542 million, and adjusted diluted EPS (non-GAAP) guidance between $6.64 and $7.28. The company maintained its forecasted adjusted effective tax rate of 23.25–25.25%.
Looking ahead, investors may want to watch for signs of improvement in the Cybersecurity & Martech segment, as well as developments in cash flow conversion across the remainder of the year. Segment diversification, the balance between advertising and subscription revenue, and further M&A activity -- alongside the company’s ongoing legal actions to protect its intellectual property -- will likely be key themes as the business executes on its stated strategy.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
