On August 8, 2024, Ziff Davis Inc (ZD, Financial) released its 8-K filing reporting its financial results for the second quarter ended June 30, 2024. Ziff Davis, a vertically focused digital media and internet company, operates leading brands in technology, entertainment, shopping, health, cybersecurity, and martech.
Performance Overview
For Q2 2024, Ziff Davis Inc (ZD, Financial) reported revenues of $320.8 million, a 1.6% decrease from $326.0 million in Q2 2023, falling short of the analyst estimate of $332.93 million. Income from operations also saw a significant decline of 26.5%, dropping to $28.6 million from $38.9 million in the same period last year.
However, the company reported a notable increase in net income, which rose to $36.9 million from $16.7 million in Q2 2023. This resulted in a net income per diluted share of $0.77, surpassing the analyst estimate of $0.59.
Key Financial Metrics
Adjusted EBITDA for the quarter decreased by 9.8% to $96.3 million, compared to $106.7 million in Q2 2023. Adjusted net income also fell by 9.8% to $53.7 million, with adjusted net income per diluted share decreasing by 7.1% to $1.18.
Despite these declines, Ziff Davis Inc (ZD, Financial) reported an increase in net cash provided by operating activities, which rose to $50.6 million from $39.7 million in Q2 2023. Free cash flow also saw a significant increase, reaching $25.1 million compared to $14.5 million in the same period last year.
Segment Performance
| Segment | Q2 2024 Revenue ($M) | Q2 2023 Revenue ($M) | % Change |
|---|---|---|---|
| Digital Media | 251.8 | 252.8 | (0.4)% |
| Cybersecurity and Martech | 69.0 | 73.2 | (5.8)% |
| Total Revenues | 320.8 | 326.0 | (1.6)% |
Balance Sheet and Cash Flow
As of June 30, 2024, Ziff Davis Inc (ZD, Financial) held approximately $839.7 million in cash, cash equivalents, and investments. The company deployed around $84.0 million primarily related to share repurchases and $17.2 million for current and prior year acquisitions.
CEO Commentary
"Our recent acquisition activity gives us confidence that we are back on the path to steady and compounding growth," said Vivek Shah, Chief Executive Officer of Ziff Davis. "We are prepared to continue to act with conviction and decisiveness on accretive, value-driving opportunities."
Analysis and Outlook
The mixed results for Q2 2024 highlight both the challenges and opportunities facing Ziff Davis Inc (ZD, Financial). While the company missed revenue estimates and saw declines in several key metrics, the significant increase in net income and cash flow indicates strong underlying financial health. The reaffirmation of its 2024 guidance suggests confidence in future performance, driven by strategic acquisitions and operational efficiencies.
For value investors, the company's robust cash position and strategic focus on high-growth digital media and cybersecurity sectors present a compelling case for long-term investment. However, the decline in revenue and operating income underscores the need for cautious optimism and close monitoring of future performance.
Explore the complete 8-K earnings release (here) from Ziff Davis Inc for further details.
