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DATE

Friday, May 8, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Vivek Shah
• Chief Financial Officer — Bret Richter

TAKEAWAYS

• Revenue -- $267.6 million, down 1.9% year over year, reflecting nearly 13% decline in Tech & Shopping offset by nearly 3% growth in other segments.
• Adjusted EBITDA -- $63.4 million versus $71.4 million previously, with margin at 23.7%, down 2.5 percentage points year over year.
• Adjusted Diluted EPS -- $0.73 compared to $0.77 year over year, reflecting lower share count from the buyback program.
• Advertising and Performance Marketing Revenue -- Fell 5.1% year over year; subscription and licensing revenue rose 1.9% for the period.
• Segment Revenue Trends -- Gaming & Entertainment rose over 7%; Health & Wellness grew slightly; Cybersecurity & Martech increased nearly 4%.
• Tech & Shopping Traffic -- Social video views for the shopping group rose more than 75% year over year across major platforms.
• AI Integration -- "Advances in the technology now put AI at the center of the development process," with new product cycles shortened from weeks to days according to management.
• Cash and Investments -- Cash and equivalents of $520 million, plus $100 million in long-term investments, excluding $26 million linked to the Connectivity business.
• Share Repurchases -- 1.2 million shares bought back for $51.6 million in Q1, with a further 560,000 shares repurchased since April 1; over 15 million shares repurchased since mid-2020.
• Connectivity Business Sale -- Transaction pending close, with proceeds excluded from current figures; management states, "we expect to close in the coming months."
• New Acquisitions -- Popular Science, Dwell, Domino, and Business of Home acquired in Q2 at "an adjusted EBITDA multiple that is accretive to our own."
• Free Cash Flow -- Negative $3.2 million for the quarter, versus negative $5 million one year ago; last-twelve-months free cash flow nearly $290 million with 60% adjusted EBITDA conversion including Connectivity.
• Capital Allocation Shift -- CEO Shah said, "we see this as a pivot from our buy-and-hold past to a future in which active monetization represents a key tool."
• Guidance and Outlook -- No annual guidance for fiscal 2026; Q2 expected to show slightly higher revenue decline year over year and similar margin pressure to Q1, with potential revenue growth in the second half.

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RISKS

• Tech & Shopping Headwinds -- Management noted "continued and expected traffic pressures" impacting affiliate commerce and programmatic display advertising revenues.
• Margin Deterioration -- Adjusted EBITDA margin fell 2.5 percentage points to 23.7%, attributed to high-margin revenue declines and segment mix shifts.
• Health & Wellness Booking Delays -- "HCP advertising on MedPage Today, however, fell in Q1 due to bookings delays across certain key pharma clients."
• Negative Free Cash Flow -- Q1 reported negative free cash flow of $3.2 million, though management notes seasonality and working capital needs.

SUMMARY

Ziff Davis (ZD +2.16%) reported year-over-year declines in revenue, adjusted EBITDA, and margins, driven mainly by substantial drops in Tech & Shopping segment revenues and continued pressure on high-margin affiliate and programmatic streams. Management emphasized the company’s active approach to portfolio optimization with a move toward asset monetization, ongoing share repurchases, and new brand acquisitions, while withholding annual guidance due to strategic review activity. Expansion of advanced AI capabilities was highlighted as an emerging structural lever to boost operating leverage and accelerate product development cycles, as stated by management.

• Management said, "the market continues to assign a very low multiple to the adjusted EBITDA of the rest of our portfolio of businesses," underscoring current valuation concerns.
• Off-platform audience engagement via social channels and third-party partnerships is being used to counteract pressures on core web traffic, particularly in shopping and affiliate segments.
• Gaming & Entertainment and select Health & Wellness assets, including Lose It! and PRIME, recorded record first-quarter revenues, partially offsetting other operational hurdles.
• Pending sale of the Connectivity business, when completed, may materially alter revenue mix and future margin profiles, with margin enhancement initiatives planned post-transaction according to CFO Richter.

INDUSTRY GLOSSARY

• Affiliate Commerce: Revenue derived from directing traffic or sales leads to merchants in exchange for a commission.
• Programmatic Display Advertising: Automated ad buying and placement using real-time bidding on digital platforms.
• Off-Platform Monetization: Earning revenue from content engagement outside of owned websites or apps, such as social media or third-party distribution.
• Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, excluding items specified by the company to better reflect core operating performance.
• HCP Advertising: Marketing efforts targeted at health care professionals for products or services, especially within the pharmaceutical sector.

Full Conference Call Transcript

Operator: Good day, ladies and gentlemen, and welcome to the Ziff Davis First Quarter 2026 Earnings Conference Call. My name is Tom, and I will be the operator assisting you today. [Operator Instructions] On this call will be Vivek Shah, CEO of Ziff Davis, and Bret Richter, Chief Financial Officer of Ziff Davis. I will now turn the call over to Bret Richter, Chief Financial Officer of Ziff Davis. Thank you. You may begin.

Bret Richter: Thank you. Good morning, everyone, and welcome to the Ziff Davis Investor Conference Call for the First Quarter of Fiscal Year 2026. As the operator mentioned, I am Bret Richter, Chief Financial Officer of Ziff Davis, and I am joined by our Chief Executive Officer, Vivek Shah. A presentation is available for today's call. This presentation and our earnings release are available on our website, www.ziffdavis.com. You can also access the webcast from this site. When you launch the webcast, there is a button on the viewer on the right-hand side, which will allow you to expand the slides. After completing the presentation, we'll be conducting a Q&A. The operator will provide instructions regarding the procedures for asking questions.

In addition, you can e-mail questions to [email protected]. Before we begin our prepared remarks, allow me to read the safe harbor language. As you know, this call and the webcast will include forward-looking statements. Such statements may involve risks and uncertainties that could cause actual results to differ materially from the anticipated results. Some of those risks and uncertainties include, but are not limited to, the risk factors that we have disclosed in our SEC filings, including our 10-K filings, recent 10-Q filings, various proxy statements and 8-K filings as well as additional risks and uncertainties that we have included as part of the slide show for the webcast.

We refer you to discussions in those documents regarding safe harbor language and forward-looking statements. In addition, following our business outlook slides are our supplemental materials, including reconciliation statements for non-GAAP measures to their nearest GAAP equivalent. Now let me turn the call over to Vivek for his remarks.

Vivek Shah: Thank you, Bret, and good morning, everyone. Before I discuss our first quarter results, I want to share some high-level thoughts about the company and our vision. Ziff Davis' edge has always consisted of identifying, acquiring and improving businesses. From our first acquisition of PCMag in 2010, for a little more than $20 million, we have been a patient and disciplined buyer of digital media and Internet companies. We've always been focused on business transformation, free cash flow generation and cash-on-cash returns. That model compounded value for a decade, and our shareholders were nicely rewarded.

But in recent years, we believe the public market has increasingly denied Ziff Davis reasonable credit for the intrinsic value of the businesses that it owns. Our response, however, is not to abandon the acquisition program that has defined Ziff Davis, but to expand our capital allocation to embrace significant repurchases of our stock while also pursuing monetization opportunities for our businesses where we see an opportunity to unlock value through a transaction. In simple terms, we see this as a pivot from our buy-and-hold past to a future in which active monetization represents a key tool in our pursuit of shareholder value creation.

We're pleased with the market response to the announced sale of the Connectivity business, which we expect to close in the coming months. However, we believe that the current trading value of our stock implies that the market continues to assign a very low multiple to the adjusted EBITDA of the rest of our portfolio of businesses. In other words, despite the market's positive reaction to the announcement of the sale of the Connectivity business, our current stock price implies that we're only getting credit to the expected cash proceeds of the connectivity sale while little additional value is being ascribed to the rest of our assets.

As a result, we will continue to engage in the pursuit of transactions that offer the opportunity to highlight the value of the businesses in our portfolio. We recognize that we own some businesses facing headwinds and that require turnarounds. However, we believe that we also have businesses worth well in excess of what our current stock price implies. The market appears to be penalizing the better-performing businesses in our portfolio for sharing an ownership structure with those that are under pressure. We believe we can unlock value through active monetization while working to turn around those businesses facing headwinds.

At the same time, we can use our balance sheet to continue to return meaningful capital to shareholders while investing in acquisitions that offer the opportunity for attractive future returns for the company. Just last week, we bought a few excellent brands, including Popular Science, Dwell, Domino and the Business of Home for an adjusted EBITDA multiple that is accretive to our own. I'll quote Ben Graham. The intelligent investor is a realist who sells to optimists and buys from pessimists. Now let me shift to our first quarter results. Please note that the Connectivity segment is not included in the continuing operations results, which Bret and I are discussing today.

Our revenue for the first quarter fell almost 2% versus last year with a decline of approximately 13% in Tech & Shopping, offset by nearly 3% growth in the rest of the company. I'll share some observations about each of our 4 continuing reportable segments. Starting with Tech & Shopping, lower revenue came as a result of continued and expected traffic pressures across the segment, impacting affiliate commerce and programmatic display advertising. These declines were partially offset by growth in off-platform monetization, licensing and sponsored content. Building upon off-platform success within the tech portfolio, our shopping group has driven its off-platform growth with social video views growing more than 75% year-over-year across Instagram, YouTube and TikTok.

We're encouraged that the sequential decline in revenues for the Tech & Shopping segment improved, and we expect each successive quarter in 2026 to be better on a year-over-year basis as compared with the prior quarter. Gaming & Entertainment had a strong quarter, with revenues up over 7%, driven by a record quarter at Humble Bundle and significant growth in both subscription and performance marketing revenues. Map Genie, IGN's map tools destination for gamers increased views by 24% in Q1. While AI search summaries can impact traditional web article performance, Map Genie's interactive approach offers a unique on-site experience that draws repeat visits. IGN has kicked off a year-long program to mark its 30th anniversary.

As part of that, we released the key Audience Insights report, Generations in Play, offering a detailed picture of the evolving consumption habits of today's gaming and entertainment audience. The findings are already at work inside IMAGINE, our proprietary audience intelligence platform, where they inform how we identify, model and activate audiences at scale for our advertising partners. While Health & Wellness revenues were up only slightly year-over-year in Q1, it's worth unpacking. We had strong consumer pharma ad revenues in Q1 driven by higher GLP-1 ads and continued positive market reception to our AI-powered data activation tool, HALO. Its audience insights are used to inform campaign design, target audiences and improve performance.

We are also seeing momentum in our hospital media network, where we serve as the exclusive digital advertising partner for highly trusted medical institutions. We just secured a long-term extension of our relationship with the Cleveland Clinic, which now has the highest traffic of any digital consumer health brand. Our AI-powered weight and nutrition management app, Lose It! continued to thrive, posting record Q1 revenues. Our PRIME continuing medical education business also had record Q1 revenues as it expanded into a broader set of therapeutic areas. HCP advertising on MedPage Today, however, fell in Q1 due to bookings delays across certain key pharma clients. MedPage Today bookings for the balance of the year are improving.

Pregnancy and parenting revenue also fell due to year-over-year declines in traffic-related programmatic and affiliate commerce revenues. Cybersecurity & Martech revenues grew nearly 4% year-over-year in Q1, driven by strong performance in the cybersecurity business. In Q1, we significantly enhanced the digital security of IPVanish with the release of Threat Protection Pro, which was designed to provide always on malware protection, whether or not a user has the VPN connected. With this milestone, IPVanish now delivers a full range of privacy, data protection and malware detection to consumers. VIPRE Security launched a native product integration with Docebo, a leading enterprise learning management system.

PhishProof by VIPRE and Docebo delivers targeted security training when employees fail a simulated phishing attack, enabling organizations to implement real-time behavior-based risk reduction. I want to touch briefly on how we're using AI to transform the way we build products. The traditional software development life cycle was designed around long running, human-driven processes with significant time spent on planning, coordination and process overhead rather than the work itself. The first wave of AI tools largely got bolted on to that same process as assistants. Advances in the technology now put AI at the center of the development process, drafting requirements, proposing architecture and generating code and tests.

As AI handles the routine work, our teams come together in collaborative spaces for real-time problem solving, creative thinking and rapid decision-making. This shift from isolated work to high-energy teamwork accelerates both innovation and delivery with cycles that took weeks now compressed into days. We're deploying this approach across key product and engineering teams. Over time, we expect this to become a meaningful structural source of operating leverage, providing faster time to market, lower cost per feature delivered and the ability to support a broader product road map without proportionately scaling engineering headcount.

Looking ahead, Ziff Davis is in a strong financial position with a robust portfolio of durable, trusted brands across multiple high-value market segments with significant revenue, adjusted EBITDA and free cash flow, a strong balance sheet and significant investable cash resources, both current and the portion that is pending the sale of the Connectivity business. With that, let me hand the call back to Bret.

Bret Richter: Thank you, Vivek. Let's discuss our financial results. Our earnings release reflects both our GAAP and adjusted financial results for Q1 2026. My commentary will primarily relate to our Q1 2026 adjusted financial results for continuing operations, excluding the Connectivity division and their comparisons to the relevant prior period. Please see Slide 4 for the summary of our Q1 2026 financial results. Q1 2026 revenues were $267.6 million. This reflects a decline of 1.9% as compared with revenues of $272.8 million for Q1 2025. Q1 2026 adjusted EBITDA was $63.4 million as compared with $71.4 million for the prior year period.

Our adjusted EBITDA margin for the quarter was 23.7%, down 2.5 percentage points as compared with adjusted EBITDA margin of 26.2% in Q1 2025. Q1 2026 adjusted diluted EPS was $0.73 as compared to $0.77 in the prior year period. These results are largely consistent with the Q1 2026 expectations we provided last quarter. When we forecasted overall revenues flat to slightly down year-over-year and a decline of approximately 3 percentage points in our adjusted EBITDA margins, with our adjusted diluted EPS benefiting from a year-over-year drop in our shares outstanding due to our active buyback program. Slide 5 reflects performance summaries for our 2 primary sources of revenue, advertising and performance marketing and subscription and licensing.

Q1 2026 advertising and performance marketing revenue declined 5.1% as compared with the prior period, while subscription and licensing revenues increased by 1.9%. Other revenues increased by approximately $1.8 million year-over-year in Q1 2026. Slide 6 through 9 reflect the Q1 financial results of each of our 4 continuing reportable segments. Tech & Shopping margins declined due to lower revenue, particularly reflecting a reduction in high-margin affiliate marketing traffic. Gaming & Entertainment margins was slightly lower year-over-year due in part to a larger revenue contribution from the e-commerce business at IGN Store. Health & Wellness margins were lower despite a modest revenue increase.

Margins reflect a revenue mix shift due in part to some of the booking delays that Vivek noted earlier as well as a higher revenue contribution in the quarter from the Consumer division. In our Cybersecurity & Martech segment, margins were down year-over-year due in part to revenue mix shifts among the Martech offerings. Please refer to Slide 10 as we review our balance sheet. As of the end of Q1 2026, we had $520 million of cash and cash equivalents and $100 million of long-term investments. However, please note that these figures exclude approximately $26 million of cash and cash equivalents associated with our connectivity business.

We continue to have significant leverage capacity on both a gross and net leverage basis. We have not included our Q1 leverage ratios on this slide due to the exclusion of our Connectivity business from adjusted EBITDA from continuing operations, and the fact that the receipt of the cash proceeds associated with the transaction is still pending. However, our balance sheet remains strong, and we intend to provide updated leverage ratio information on a trailing 12-month adjusted EBITDA basis, assuming that Connectivity sale is finalized, and we received the proceeds from the sale. We continue to dedicate significant investable capital to our stock buyback program. During the first quarter, we bought back approximately 1.2 million shares under a 10b5-1 plan.

We deployed $51.6 million related to share repurchases in the quarter, including $6.7 million related to stock-based compensation net share settlements. Since April 1, 2026, we have also repurchased approximately 560,000 additional shares in the open market. Cumulatively, since the start of our current buyback program in mid-2020, we have repurchased more than 15 million shares. The total amount currently available for repurchase under our Board's current buyback authorization is approximately 9.7 million shares, and we plan to continue to be an active repurchaser of our stock. However, as a reminder, given our ongoing review of potential value-creating opportunities, there may be periods of time when we are not able to repurchase shares under this authorization.

We did not complete any acquisitions during Q1 2026. In Q2, so far, we have completed one acquisition, which Vivek mentioned in his remarks, and we plan to be a disciplined acquirer in 2026 as opportunities arise to add businesses at attractive prices and offer the potential for strong cash-on-cash returns. Looking ahead to the rest of 2026, our primary financial objectives remain unchanged. Driving profitable growth, generating robust free cash flow and highlighting the intrinsic value of our businesses to our shareholders. As we noted in our earnings release, we are not providing annual guidance for fiscal 2026 as our exploration of value-creating opportunities is an ongoing process.

However, I would like to offer some insight related to certain of our expectations for the balance of 2026. We expect our Q2 2026 results from continuing operations to largely reflect our performance in Q1 2026. Revenues in Q2 are expected to be down at a slightly higher year-over-year rate than in Q1 and Q2 2026 adjusted EBITDA margins are expected to reflect a similar year-over-year decline in Q2 as compared to Q1 2026. Some of this impact to adjusted diluted EPS will again be offset by a year-over-year reduction in our shares outstanding due to our active buyback program.

Our goal is to return to total year-over-year growth in revenues from continuing operations for the second half of 2026, with the fourth quarter being stronger than the third. This would reflect an improvement in the rate of decline of tech and shopping with modest overall growth from the combined contribution of gaming and entertainment, health and wellness and cyber and martech. This should result in an improvement in adjusted EBITDA margins from continuing operations, allowing our consolidated margin to approach the levels we saw in the second half of 2025. Margins continue to be a focus of our company.

In 2025, our connectivity business was our business with the highest adjusted EBITDA margin percentage, and we are very conscious of the impact that the sale will have on the company's adjusted EBITDA margin from continuing operations. As we continue to pursue valuation enhancement opportunities, we will simultaneously seek to identify opportunities to improve our post-transaction margins through the implementation of new approaches, practices and, in particular, the use of AI. Turning now to our supplemental information. Slide 13 provides a summary of our adjusted results from continuing operations for each quarter of 2025 as well as the first quarter of 2026.

Please note that these figures include approximately $2.8 million of certain overhead expenses in the full year 2025 in our corporate segment, which were previously reported in the Connectivity reportable segment. For a period of time after the closing, a portion of these expenses are expected to be offset by payments received for certain transition services that we expect to provide to Accenture. Slides 14 through 17 show reconciliation statements for the various non-GAAP measures to the nearest GAAP equivalents. Slide 18 includes a reconciliation of free cash flow on a combined basis, including the free cash flow associated with the connectivity business.

Q1 2026 reflects negative free cash flow of $3.2 million as compared to negative free cash flow of $5 million in the first quarter of 2025. As a reminder, our TDS gift card business is a significant user of working capital in the first quarter of each year. Overall, during the last 12 months, our free cash flow was nearly $290 million, and our free cash flow conversion from adjusted EBITDA, including Connectivity, was nearly 60%. Please note that in 2026, we expect our conversion rate of adjusted EBITDA to free cash flow to be negatively impacted by certain professional fees and taxes associated with the sale of Connectivity.

However, excluding certain discrete items, such as this going forward, we expect continued strong free cash flow conversion of our continuing operations adjusted EBITDA. Overall, we are very pleased with what we were able to accomplish in the first quarter of 2026, and we are encouraged by the revenue growth exhibited by a number of our businesses. As we move forward in 2026, we remain focused on executing our plans to continue to deliver shareholder value in the coming quarters. And with that, I will now ask the operator to rejoin us to instruct you on how to queue for questions.

Operator: [Operator Instructions] And the first question this morning is coming from Cory Carpenter from JPMorgan.

Cory Carpenter: I had two. I wanted to go -- you mentioned the off-platform strategy that you're implementing. Could you just talk about how big -- how far are you along in that off-platform strategy for some of your digital properties? And what are some of the initiatives that you're working on there that you're most excited about? And then Vivek appreciate your update on capital allocation. Should we think of this as a permanent shift in your strategy? Or is this kind of a temporary thing as you work to refine your portfolio and unlock value with your existing assets?

Vivek Shah: Yes. Great questions, Cory. So I'll start on the traffic side. And we've had a lot of success in generating monetization out of our footprint on social media. So that's Instagram, TikTok, Snapchat, Facebook, primarily, where if you look at a number of our brands, we have pretty significant follower counts, and we're able to leverage those follower accounts into ad programs and ad revenue. Video is also pretty important to a number of our brands, in particular, IGN. If you look at the IGN YouTube subscriber base, it's significant. And so that's also a key part of our off-platform activity. But I would also say that we have partnerships. So within the Health business, I mentioned Cleveland Clinic.

We also have the Mayo Clinic, and we are working on some other medical partners where we are their advertising, exclusive advertising monetization partner. And then there's e-mail, there's apps. There are a variety of different ways in which we can engage CTV, also is another important one. So it's a pretty diversified set of off-platform traffic. And as I've said, that can replace the web traffic, the organic web traffic that's under pressure.

I will point out 2 things, however, that there is -- and I said this the last time or in the last call, there's certain traffic, particularly the affiliate commerce-oriented traffic when somebody is seeking a buying guide or a product review that is harder for us to replace. The unit economics there are pretty compelling. And then also with respect to platforms, some of these platforms come with essentially a rev share or a tax. And so those are things that our dynamics as we look at this evolution. On your second question, yes, we do view asset monetization as a new ongoing tool in our kit.

And as I said, as long as the public market value of our EBITDA remains low, and it does, we're going to continue to pursue asset monetization. If we see recovery in the public market value of our businesses, then we might find ourselves holding longer. But the overall message is that we view the portfolio as dynamic and ultimately optimized for shareholder value.

Operator: Your next question is coming from Robert Coolbrith from Evercore.

Robert Coolbrith: I just wanted to ask a little bit on the MedPage bookings. Any more color there? I think generally speaking, throughout the quarter, we've heard about a lot of strength in HCP spend, particularly in rare disease, but just generally. And any competition from any emerging players? Or is that really being sort of managed separately as part of a search budget? Or is that sort of bleed over? And then, Bret, as you look at the strategic review process for other parts of the business, do you think that there is the ability to sort of neatly carve out whole segments?

Or is there, in your view, less likely sort of probability of finding a single last dollar buyer for sort of whole segments? Yes, I'll just leave it there.

Vivek Shah: Yes. So let me start on the question relating to MedPage and then let Bret get in on the second one. So yes, look, we had a tough Q1 for MedPage, I think it's a combination of timing, some very specific advertisers who weren't booking in Q1. Now as I said, we're seeing improvement going into Q2 into the balance of the year. So hopefully, this is largely timing. But at the same time, I think there's just more market entrants.

I think the HCP part, the health care professional part of the pharma ecosystem does have just a number of new entrants in it, and that's adding inventory, I think, to a fairly -- what has fairly been a pretty tight market. And so it is a little bit of a tale of 2 cities, where on the consumer side, we had a very good quarter, a very strong one on the direct-to-consumer side. But on the direct-to-provider side, it was more challenging. Having said that, the continuing medical education business, which is called PRIME, which operates a little bit differently, not your conventional HCP engagement advertising, that continues to do well for us. So look, it's a mixed bag.

As you know, the health segment has been a very strong segment for us for a while now. So I kind of view these as hopefully, temporary glitches in what's going on. And then I'll just throw in because we're talking about health and wellness and while you didn't ask the parenting and pregnancy piece, that is also one where the traffic challenges, particularly with respect to affiliate commerce within BabyCenter and What to Expect when someone is clicking on to buy a stroller or layette or something like that. That also has had -- the search challenges have presented themselves there. So I'll pause there and let Bret answer the second question.

Bret Richter: Thanks, Vivek. And thanks, Robert. I think the way I'd approach this answer is our goal is to pursue a per share value enhancement. And as a result of that, we leave the aperture open for all sorts of pursuits and possibilities, transactions and transaction structures. Obviously, through the sale of Connectivity, that was one of our reportable segments, 1 of our 5 divisions. And the governor is not to limit ourselves to a transaction like that or exclude another transaction like that. The facts and circumstances will present themselves as we pursue different opportunities. Sometimes it's a reaction inbound, sometimes it's an effort to stimulate inbound.

But essentially, the governor is our perception of the implied value of the business based on how our stock is trading versus what the private market value might be. And is there an opportunity to realize that gap in some efficient manner.

Operator: Your next question is coming from Ron Josey from Citi.

Ronald Josey: I wanted to drill down a little bit more on the operations of the business. And I was interested in your comments that a little more than 75% growth in social views for shopping and how you view -- and so I wanted to understand how do you view social's way to manage traffic longer term and other sources of, call it, distribution longer term as we have these call it, traffic headwinds to search? And then as it relates to AI, your commentary on where we stand and how product development should improve.

Talk to us about how this improvement is manifesting or how you can see this build into more products that can lead to even greater actual return and greater growth.

Vivek Shah: Yes. Great questions, Ron. So I think with respect to what you're referring to the off-platform views or the distributed media, I think what's developed over the last handful of years and maybe potentially sort of underreported is how much consumer engagement. And in fact, we get far more consumer engagement off-platform, meaning outside of the websites we own and outside of the apps we own and get far more engagement for our content in places that we don't. And so you have 2 things happening. I think one is you've seen the shift in consumer behavior. We've all experienced it. If you look at your screen time.

If you use an iPhone, you'll see how much of your time is actually not in the browser and is on these platforms. And so we're going to go with the consumers. And so we've done that. But the other piece that's come together is the ability to monetize that. I think in the early days of social media, it was difficult to figure out how to extract a rent. That has been solved across all of these platforms. And I think the platforms understand that we feed them with high-quality content, high-quality audience and are more than happy to allow us to extract the rent, and they often share in that extraction of rent.

So I think that ecosystem has come together nicely. I think it's been somewhat well timed with some of the challenges we've had, I think, as an industry with search. On your question around where does what we're doing in AI show up. And I think it's going to show up and has started to show up in product features, and I've talked in the past about things that we have implemented that I think have driven growth at properties like Lose It! and at VIPRE. And then I've talked about HALO and Clara and Imagine and the AI-based ad targeting and insights engines that we've created.

So we've had a number of products that I would call customer-facing, whether it's consumer-facing or market-facing from a B2B point of view, but also from a product and engineering velocity point of view, we have long pipelines across all of our various products of things that we want to have happen and do. And in the past, where we would talk 4 quarters out or 5 quarters out, we're now talking weeks out to push product. And I think that velocity is going to be really valuable in unlocking revenue. With respect -- and so 1 or 2 things happens.

Either we're in a business where the pipeline isn't -- the product pipeline and what we're looking to do isn't deep, at which point this is going to be a cost savings because we're going to be able to use fewer resources to do same or it is very deep, and we're using same resources to accelerate. Either way, we see value creation. And look, I think the nuance that I was trying to convey in my prepared remarks is that I think at the start of AI, we were viewing it more as sort of "copilot." It is now the pilot.

And I think that putting AI at the center of our work really is changing the velocity with which things are happening. So I'm super excited for it.

Operator: Your next question is coming from Ross Sandler from Barclays.

Ross Sandler: Vivek, it's sort of related to what you just answered on that last question, but it sounds like just from 90 days ago, and certainly from last year, we've had a bit of a tone change around internal use of AI to not only kind of push content, but also to manage cost across the organization. So could you just talk about how the thinking might have changed on that? And then related to the off-platform growing and some of the like kind of legacy affiliate high-margin declining, how does that combined with managing cost vis-a-vis AI impact your view of like operating margins or EBITDA margins across the businesses over the next couple of years?

Thoughts on that would be great.

Vivek Shah: Yes. Look, I think what is -- I don't know if anything's changed in terms of our views around the impact and the positive impact AI can make on our business. I think the toolkit has just improved significantly. I mean it is -- and we're seeing it, I think, across the board, I mean it is pretty extraordinary how much more powerful some of these models have become and their capabilities. So I think that's part of it. I also think that it's how we are staffing and how we are training our population. We've put a lot of effort into an AI-forward mindset across the entire company, and I think that's starting to engage.

And then I think, look, I think as things succeed in some parts of the portfolio -- other parts of the portfolio, we have a very good, healthy internal competitive dynamic inside the company. People see things that are happening in one place and want to see them replicate. So I think this is only going to improve, tell you that I think we are really focused on bringing in every new hire we're making is very AI-native hire. So I think that's a very important perspective as well. I think on your questions around margin, look, this is the trick. We've always been a very margin-focused company.

As Bret pointed out, with the pending close on the Connectivity business, that was our largest margin business. And so we're going to look to try to improve margins in the businesses we own, notwithstanding some of the pressures around high-margin revenues being replaced by lower margin but still very good margin businesses. Look, our free cash flow orientation is built into the DNA of the company. It is how we think. It is how we value potential acquisitions. It is honestly the source of all of our capital allocation, right? I mean, this is what we do.

We generate free cash flow, and we recycle that free cash flow, whether it's share repurchases or it is acquisitions of companies or capital investments in our business. So look, I don't -- I think our -- we're very focused on, we're a margin-first probably company, maybe more than anything else, and we recognize these dynamics that we're going to work through.

Operator: Your next question is coming from Shyam Patil from Susquehanna.

Daneal Senderovich: This is Daneal on for Shyam. I was just wondering if you could elaborate a bit on the acquisitions of Popular Science, Dwell, Domino and Business of Home. Just what was the rationale behind these deals? And how do you see Ziff Davis adding value to these businesses in the coming years?

Vivek Shah: Yes. So look, I think that -- you've heard me talk about this a lot. I'm a big believer in the value of brands. It is very hard, particularly in today's market to build brands. And so when you get a brand like Popular Science, which was founded 150 years ago, arguably the most famous, well-known science media brand ever, you get excited about that, and we're going to incorporate it into our tech group where science has always been an area of interest for our audience. And so I think it's a natural tuck-in for our CNET group. And then for the home and lifestyle brands, Dwell is a great architecture oriented brand.

Domino is a great interior design brand, Business of Home. Anyone that's in the trade knows it, reads it and will swear by it. And so getting into a category at all brands, by the way, Dwell and Domino in particular, with a very, very strong social footprint. And so from our point of view, I think helping those businesses unlock the social value that is, I think, embedded into these brands as well as unlocking other product development opportunities that exist within those spaces. And look, I think in the end, I think I pointed this out, this was from an acquisition price point of view, a very attractive one for us.

And so that's one thing that I'll say is that the market fears to us present a really unique opportunity to be an active buyer in the space. I mean, the valuations are compelling. And while these businesses are experiencing headwinds, not unlike the ones we're experiencing, I think we're showing some resilience, and we're showing the ability to manage through, transform and come out the other side with very, very valuable assets. And back to this as a manager of assets inside of the company, these are assets that I'm excited for us to own.

Operator: There are no further questions in queue at this time. I would now like to hand the call back to Bret Richter for any closing remarks.

Bret Richter: Thanks, Tom, and thank you all for joining us today on our Q1 2026 earnings call. As always, we value your time and investment in our company, and we look forward to continuing to engage with you in the coming months.

Operator: Thank you. This does conclude today's conference call. You may disconnect your lines at this time, and have a wonderful day. Thank you once again for your participation.