Ziff Davis delivered a quarter of robust growth in Q2, marked by sales and non-GAAP profitability surpassing Wall Street expectations. The market responded strongly, reflecting investor confidence in the company’s diversified business model. Management attributed outperformance to the broad-based expansion across four of five operating segments, with CEO Vivek Shah highlighting the Health & Wellness and Connectivity divisions as standout contributors. Specific product launches and successful event programming, such as IGN Live, also fueled engagement and revenue.
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Ziff Davis (ZD) Q2 CY2025 Highlights:
- Revenue: $352.2 million vs analyst estimates of $337.1 million (9.8% year-on-year growth, 4.5% beat)
- Adjusted EPS: $1.24 vs analyst estimates of $1.19 (4.5% beat)
- Adjusted EBITDA: $107.7 million vs analyst estimates of $101.2 million (30.6% margin, 6.4% beat)
- The company reconfirmed its revenue guidance for the full year of $1.47 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $6.96 at the midpoint
- EBITDA guidance for the full year is $523.5 million at the midpoint, above analyst estimates of $516.9 million
- Operating Margin: 9.5%, in line with the same quarter last year
- Market Capitalization: $1.42 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Ziff Davis’s Q2 Earnings Call
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Shyam Patil (Susquehanna) asked about the intent behind the new segment-level disclosures. CEO Vivek Shah explained the goal is to help investors better understand the intrinsic value of each business unit and to encourage a sum-of-the-parts approach to valuation.
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Cory Carpenter (JPMorgan) inquired about advertising market trends and the sustainability of double-digit revenue growth. Shah broke down ad growth by category, noting strength in Health & Wellness and Tech, and reiterated the company’s aim for double-digit revenue growth, half organic and half via acquisitions, with mid-30s margins.
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Ross Sandler (Barclays) questioned margin contraction in Tech and Health segments. Shah and CFO Bret Richter attributed this to temporary mix dynamics and one-off factors, emphasizing the need to assess margins over multiple quarters due to variability from acquisitions and investments.
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Ygal Arounian (Citi) asked about the impact of AI search and large language models on web traffic and revenue. Shah stressed the company’s diversified revenue streams, low exposure to programmatic ads, and ongoing efforts to protect content IP and form partnerships with AI companies.
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Robert Coolbrith (Evercore ISI) asked about factors driving increased advertiser participation in Health & Wellness. Shah highlighted expansion beyond pharma to broader wellness brands and the introduction of advertising to the Lose It! app’s free tier as key contributors.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will be watching (1) the pace of AI-powered product adoption and its measurable impact on advertiser engagement, (2) the return to growth in the Cybersecurity & Martech segment, and (3) continued momentum in Health & Wellness and Connectivity. Progress in integrating recent acquisitions and disciplined capital deployment will also serve as important markers for Ziff Davis’ execution.
Ziff Davis currently trades at $34.45, up from $31.10 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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