Ziff Davis — Third Quarter 2026 Earnings Summary

Financial Performance

• Total revenues decreased 5.6% year-over-year to $289.3 million in Q3 2026, compared to $306.5 million in Q3 2025; for the nine months ended September 30, 2026, revenues were $843.7 million, down 3.5% from $874.2 million in the prior year period.
• Operating loss widened to $(33.6) million in Q3 2026 from operating income of $11.4 million in Q3 2025; for the nine months, operating loss was $(75.4) million versus operating income of $39.7 million in the prior year period.
• Net loss from continuing operations increased to $(28.7) million in Q3 2026 from $(16.0) million in Q3 2025; for the nine months, net loss from continuing operations was $(81.6) million compared to net income of $8.2 million in the prior year period.
• Net loss per diluted share from continuing operations was $(0.85) in Q3 2026, compared to $(0.39) in Q3 2025; for the nine months, loss per share was $(2.27) versus $0.20 in the prior year period.
• Adjusted EBITDA decreased 16.0% to $82.2 million in Q3 2026 from $97.8 million in Q3 2025; for the nine months, Adjusted EBITDA was $222.4 million, down 10.7% from $249.0 million.
• Adjusted EBITDA margin was 28.4% in Q3 2026, down from 31.9% in Q3 2025; for the nine months, the margin was 26.4% compared to 28.5%.
• Adjusted net income decreased 15.0% to $48.3 million in Q3 2026 from $56.8 million in Q3 2025; for the nine months, Adjusted net income was $113.7 million, down 11.1% from $127.9 million.
• Adjusted diluted EPS decreased 0.7% to $1.39 in Q3 2026 from $1.40 in Q3 2025; for the nine months, Adjusted diluted EPS was $3.12, up 1.6% from $3.07.
• Net cash used in operating activities from continuing and discontinued operations was $(77.1) million in Q3 2026, compared to $138.3 million provided in Q3 2025; for the nine months, net cash provided was $41.8 million, down 80.6% from $216.0 million.
• Free cash flow from continuing and discontinued operations was $(100.1) million in Q3 2026, compared to $108.2 million in Q3 2025; for the nine months, free cash flow was $(49.3) million versus $130.1 million.
• Transaction adjusted free cash flow from continuing and discontinued operations was $(10.0) million in Q3 2026, compared to $108.2 million in Q3 2025; for the nine months, it was $50.1 million, down 61.5% from $130.1 million.
• Goodwill impairment of $29.6 million was recognized in Q3 2026, compared to $17.6 million in Q3 2025; long-lived asset impairment of $6.4 million was recognized in Q3 2026, with no such charge in Q3 2025.
• Cash and cash equivalents increased to $1,407.7 million as of September 30, 2026, from $573.8 million as of December 31, 2025.
• Total debt (current and long-term) was $868.2 million as of September 30, 2026, compared to $866.5 million as of December 31, 2025.
• Deferred revenue (current and noncurrent) totaled $127.7 million as of September 30, 2026, down from $136.2 million as of December 31, 2025.

Guidance and Future Outlook

• Management stated results were in line with expectations set in the previous quarter, noting sequential revenue growth despite a challenging operating environment.
• The Company indicated it will continue pursuing opportunities to unlock additional shareholder value.

Business Segments and Product Lines

• Technology & Shopping revenue decreased 3.8% to $82.0 million in Q3 2026 from $85.2 million in Q3 2025; for the nine months, revenue was $229.9 million, down 7.2%.
• Gaming & Entertainment revenue decreased 2.1% to $46.6 million in Q3 2026 from $47.6 million in Q3 2025; for the nine months, revenue was $134.0 million, up 1.6%.
• Health & Wellness revenue decreased 9.5% to $92.5 million in Q3 2026 from $102.3 million in Q3 2025; for the nine months, revenue was $273.1 million, down 5.0%.
• Cybersecurity & Martech revenue decreased 4.6% to $68.2 million in Q3 2026 from $71.4 million in Q3 2025; for the nine months, revenue was $206.7 million, down 0.2%.
• The Connectivity business was sold in the second quarter of 2026 and is classified as a discontinued operation; it is no longer a reportable segment.

Market and Competitive Landscape

• The press release notes a "challenging operating environment" but does not provide specific market share data or detailed competitor analysis.
• The "Safe Harbor" statement lists general market risks including increased competition, rapid technological changes, and variability of revenue based on changing industry conditions.

Risks and Challenges

• Risks include the ability to grow advertising, licensing, and subscription revenues and profitability in light of an uncertain economy, including the possibility of recession.
• Risks related to the ability to identify, close, and successfully transition acquisitions or divestitures, and to realize anticipated benefits from the Connectivity business divestiture.
• Risks include customer growth and retention, reliance on third-party platforms, content piracy, AI developments, and protection of proprietary technology.
• Risks include potential infringement of intellectual property, loss of critical vendors or personnel, fraudulent activity, system failure, or security breaches.
• Risks include adverse changes in regulatory environments, supply chain disruptions, increased tariffs, inflationary conditions, and rising interest rates.
• The Company is conducting a review of potential value-creating opportunities which includes the risk of consummating a sale of one or more business lines.

Management Commentary and Tone

• Vivek Shah, CEO, stated the company delivered third quarter results in line with expectations, including sequential revenue growth despite a challenging operating environment.
• Management highlighted that through the first three quarters of 2026, the Company repurchased approximately $265 million of shares, reducing the share count by nearly 14%.
• Management expressed a continued intent to pursue opportunities to unlock additional shareholder value.

Other Key Points

• The Company deployed approximately $92.0 million for share repurchases during Q3 2026.
• The Company deployed approximately $7.0 million for current and prior year acquisitions during Q3 2026.
• For the nine months ended September 30, 2026, the Company repurchased approximately $265 million of shares in total.
• The sale of the Connectivity business generated proceeds of $1,134.1 million in investing activities for the nine months ended September 30, 2026.
• The Company recognized a gain on the sale of businesses of $860.6 million in the nine months ended September 30, 2026.
• Net income from discontinued operations was $699.7 million for the nine months ended September 30, 2026, primarily driven by the sale of the Connectivity business.
• The Company reported a net loss of $28.7 million for continuing operations in Q3 2026, while net income including discontinued operations was $0.0 million (net loss of $28.7 million from continuing operations offset by $0 from discontinued operations in the quarter).
• For the nine months ended September 30, 2026, total net income was $618.0 million, driven by the $699.7 million gain from discontinued operations, resulting in a net loss of $81.6 million from continuing operations.