NEW YORK–(BUSINESS WIRE)–Ziff Davis, Inc. (NASDAQ: ZD) (“Ziff Davis”) today reported unaudited financial results for the second quarter ended June 30, 2022.
“We continue to skillfully navigate a difficult and challenging operating environment with a strategy of producing near-term earnings growth while positioning the company for an eventual macro-economic recovery,” said Vivek Shah, Chief Executive Officer of Ziff Davis. “At the same time, we continue to strengthen our balance sheet as we seek acquisition opportunities that enhance our businesses and grow and diversify our revenue streams.”
SECOND QUARTER 2022 RESULTS
On October 7, 2021, Ziff Davis completed the spin-off of its Consensus Cloud Solutions, Inc. (“Consensus”) business. Ziff Davis has classified Consensus as a discontinued operation in its financial statements for the three and six months ended June 30, 2021 results. Historical results in this press release represent continuing operations, except for the Statement of Cash Flows, net cash provided by operating activities and free cash flow during the three and six months ended June 30, 2021, which are on a combined continuing and discontinued operations basis.
Q2 2022 quarterly revenues decreased 1.1% to $337.4 million compared to $341.3 million for Q2 2021. On a pro-forma(1) basis, Q2 2022 quarterly revenues increased 2.2% to $337.4 million as compared to $330.0 million for Q2 2021.
GAAP net loss per diluted share from continuing operations(2) increased to $0.99 in Q2 2022 compared to $0.52 for Q2 2021. The net loss increase was primarily due to losses on our investment in Consensus.
Adjusted non-GAAP net income per diluted share from continuing operations(2)(3) for the quarter increased 5.3% to $1.58 as compared to $1.50 for Q2 2021. On a pro-forma(1) basis, Adjusted non-GAAP net income per diluted share from continuing operations(2)(3) for the quarter increased 12.1% to $1.58 compared to $1.41 for Q2 2021.
GAAP net loss from continuing operations increased to $46.4 million compared to $23.0 million for Q2 2021 primarily due to losses on our investment in Consensus.
Adjusted non-GAAP net income from continuing operations increased by 10.9% to $74.4 million as compared to $67.1 million for Q2 2021. On a pro-forma(1) basis, Adjusted non-GAAP net income from continuing operations increased by 17.7% to $74.4 million as compared to $63.2 million for Q2 2021.
Adjusted EBITDA(4) for the quarter increased 0.9% to $118.0 million compared to $117.0 million for Q2 2021. On a pro-forma(1) basis, Adjusted EBITDA(4) for the quarter increased 5.3% to $118.0 million compared to $112.1 million for Q2 2021.
Net cash provided by operating activities from continuing operations was $76.0 million in Q2 2022. Free cash flow from continuing operations(6) was $52.6 million in Q2 2022.
Ziff Davis ended the quarter with approximately $849.3 million in cash, cash equivalents, and investments after deploying during the quarter approximately $68.7 million for current and prior year acquisitions, approximately $18.2 million to repay $21.5 million of outstanding principal of its senior notes and approximately $12.7 million with respect to its share repurchase program.
Key unaudited financial results for Q2 2022 versus Q2 2021 are set forth in the following table (in millions, except per share amounts). Reconciliations of Adjusted non-GAAP net income per diluted share from continuing operations, Adjusted EBITDA and free cash flow from continuing operations to their nearest comparable GAAP financial measures are attached to this Press Release.
The following table reflects Actual and Pro-Forma Results from Continuing Operations for the second quarter of 2022 and 2021 (in millions, except per share amounts). Pro-Forma Results from Continuing Operations below excludes the operating results from the Company’s B2B Backup business that was sold in the third quarter of 2021.
|
|
QTD |
QTD |
|
Pro-Forma Results(1) |
||||||||||||
|
Q2 2022 |
Q2 2021 |
% Change |
Q2 2022 |
Q2 2021 |
% Change |
|||||||||||
|
Revenues |
|
|
|
|
|
|
||||||||||
|
Digital Media |
$ |
258.4 |
|
$ |
253.8 |
|
1.8 |
% |
$ |
258.4 |
|
$ |
253.8 |
|
1.8 |
% |
|
Cybersecurity and Martech |
$ |
79.0 |
|
$ |
87.5 |
|
(9.7 |
)% |
$ |
79.0 |
|
$ |
76.2 |
|
3.7 |
% |
|
Total revenue(5): |
$ |
337.4 |
|
$ |
341.3 |
|
(1.1 |
)% |
$ |
337.4 |
|
$ |
330.0 |
|
2.2 |
% |
|
Income from operations |
$ |
45.9 |
|
$ |
10.1 |
|
354.5 |
% |
|
|
|
|||||
|
GAAP loss per diluted share from continuing operations(2) |
$ |
(0.99 |
) |
$ |
(0.52 |
) |
90.4 |
% |
|
|
|
|||||
|
Adjusted non-GAAP income per diluted share from continuing operations(2) (3) |
$ |
1.58 |
|
$ |
1.50 |
|
5.3 |
% |
$ |
1.58 |
|
$ |
1.41 |
|
12.1 |
% |
|
GAAP net loss from continuing operations |
$ |
(46.4 |
) |
$ |
(23.0 |
) |
101.7 |
% |
|
|
|
|||||
|
Adjusted non-GAAP net income from continuing operations |
$ |
74.4 |
|
$ |
67.1 |
|
10.9 |
% |
$ |
74.4 |
|
$ |
63.2 |
|
17.7 |
% |
|
Adjusted EBITDA(4) |
$ |
118.0 |
|
$ |
117.0 |
|
0.9 |
% |
$ |
118.0 |
|
$ |
112.1 |
|
5.3 |
% |
|
Adjusted EBITDA margin(4) |
|
35.0 |
% |
|
34.3 |
% |
0.7 |
% |
|
35.0 |
% |
|
34.0 |
% |
1.0 |
% |
|
Net cash provided by operating activities from continuing operations(6) |
$ |
76.0 |
|
NA(7) |
|
|
|
|
||||||||
|
Free cash flow from continuing operations(6) |
$ |
52.6 |
|
NA(7) |
|
|
|
|
||||||||
The following table reflects Actual and Pro-Forma Results from Continuing Operations for the six months ended June 30, 2022 and 2021 (in millions, except per share amounts). Pro-Forma Results from Continuing Operations below excludes the operating results from Voice assets in the United Kingdom and the Company’s B2B Backup business that were sold in 2021.
|
|
YTD |
YTD |
|
Pro-Forma Results(1) |
||||||||||||
|
Q2 2022 |
Q2 2021 |
% Change |
Q2 2022 |
Q2 2021 |
% Change |
|||||||||||
|
Revenues |
|
|
|
|
|
|
||||||||||
|
Digital Media |
$ |
493.0 |
|
$ |
480.6 |
|
2.6 |
% |
$ |
493.0 |
|
$ |
480.6 |
|
2.6 |
% |
|
Cybersecurity and Martech |
$ |
159.4 |
|
$ |
172.4 |
|
(7.5 |
)% |
$ |
159.4 |
|
$ |
148.5 |
|
7.3 |
% |
|
Total revenue(5): |
$ |
652.4 |
|
$ |
653.0 |
|
(0.1 |
)% |
$ |
652.4 |
|
$ |
629.1 |
|
3.7 |
% |
|
Income from operations |
$ |
76.4 |
|
$ |
36.9 |
|
107.0 |
% |
|
|
|
|||||
|
GAAP (loss) income per diluted share from continuing operations(2) |
$ |
(0.47 |
) |
$ |
0.33 |
|
(242.4 |
)% |
|
|
|
|||||
|
Adjusted non-GAAP income per diluted share from continuing operations(2) (3) |
$ |
2.81 |
|
$ |
2.74 |
|
2.6 |
% |
$ |
2.81 |
|
$ |
2.60 |
|
8.1 |
% |
|
GAAP net (loss) income from continuing operations |
$ |
(21.9 |
) |
$ |
15.7 |
|
(239.5 |
)% |
|
|
|
|||||
|
Adjusted non-GAAP net income from continuing operations |
$ |
132.4 |
|
$ |
122.5 |
|
8.1 |
% |
$ |
132.4 |
|
$ |
116.3 |
|
13.8 |
% |
|
Adjusted EBITDA(4) |
$ |
218.8 |
|
$ |
217.7 |
|
0.5 |
% |
$ |
218.8 |
|
$ |
208.0 |
|
5.2 |
% |
|
Adjusted EBITDA margin(4) |
|
33.5 |
% |
|
33.3 |
% |
0.2 |
% |
|
33.5 |
% |
|
33.1 |
% |
0.4 |
% |
|
Net cash provided by operating activities from continuing operations(6) |
$ |
192.5 |
|
NA(7) |
|
|
|
|
||||||||
|
Free cash flow from continuing operations(6) |
$ |
138.6 |
|
NA(7) |
|
|
|
|
||||||||
ZIFF DAVIS GUIDANCE
The Company is revising its guidance for revenue, adjusted EBITDA and adjusted non-GAAP Diluted EPS for fiscal year 2022 as follows (in millions, except per share data):
|
|
Current Guidance |
|
Revised FY 2022 Range of Estimates |
||||||||
|
|
Low |
|
High |
|
Low |
|
High |
||||
|
Revenue |
$ |
1,497 |
|
$ |
1,535 |
|
$ |
1,410 |
|
$ |
1,435 |
|
Adjusted EBITDA |
$ |
538 |
|
$ |
555 |
|
$ |
507 |
|
$ |
519 |
|
Adjusted non-GAAP Diluted EPS |
$ |
6.52 |
|
$ |
6.79 |
|
$ |
6.57 |
|
$ |
6.77 |
| ____________________ | |||||||||||
|
* Adjusted non-GAAP net income per diluted share for 2022 excludes share-based compensation of between $24 million and $28 million, amortization of acquired intangibles and the impact of any currently unanticipated items, in each case net of tax. It is anticipated that the non-GAAP effective tax rate for 2022 (exclusive of the release of reserves for uncertain tax positions) will be between 22.25% and 23.75%. |
|||||||||||
The Company has not reconciled the non-GAAP Business Outlook for 2022 Adjusted EBITDA or Adjusted non-GAAP Diluted EPS and the associated tax rate information included in this press release to the most directly comparable GAAP measure because this cannot be done without unreasonable effort due to the variability with respect to costs related to acquisitions and taxation, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable and significant impact on our future non-GAAP financial results.
Notes:
|
(1) |
|
Pro-forma figures are provided taking into consideration the sale of certain Voice assets in the United Kingdom as well as the sale of the Company’s B2B Backup business as if they had occurred January 1, 2021. |
|
(2) |
|
The estimated GAAP effective tax rates were approximately (33.2)% for Q2 2022 and 37.4% for Q2 2021. The estimated Adjusted non-GAAP effective tax rates were approximately 22.7% for Q2 2022 and 22.3% for Q2 2021. |
|
(3) |
|
Adjusted non-GAAP net income per diluted share excludes certain non-GAAP items, as defined in the Reconciliation of GAAP to Adjusted non-GAAP financial measures, for the three months ended June 30, 2022 and 2021 which totaled $2.57 and $2.02 per diluted share, respectively. |
|
(4) |
|
Adjusted EBITDA is defined as net income from continuing operations before interest; gain on sale of businesses; loss on investments, net, unrealized gain (loss) on short-term investments, other income (expense), net; income tax expense (benefit); income (loss) from equity method investments, net; depreciation and amortization; and the items used to reconcile EPS to Adjusted non-GAAP EPS, as defined in the Reconciliation of GAAP to Adjusted non-GAAP financial measures. Adjusted EBITDA amounts are not meant as a substitute for GAAP, but are solely for informational purposes. |
|
(5) |
|
The revenues associated with each of the businesses may not foot precisely since each is presented independently. |
|
(6) |
|
Free cash flow from continuing operations is defined as net cash provided by operating activities from continuing operations, less purchases of property and equipment from continuing operations, plus contingent consideration from continuing operations. Free cash flow amounts are not meant as a substitute for GAAP, but are solely for informational purposes. There were no discontinued operations in 2022. |
|
(7) |
|
NA = Not available. The Company has not prepared net cash provided by operating activities from continuing operations and free cash flow from continuing operations for the second quarter of 2021. Net cash provided by operating activities from continuing and discontinued operations on a combined basis and free cash flow from continuing and discontinued operations on a combined basis for the three months ended June 30, 2021 was $111.3 million and $80.5 million, respectively. Free cash flow from continuing and discontinued operations is defined as net cash provided by operating activities from continuing and discontinued operations, less purchases of property and equipment from continuing and discontinued operations, plus contingent consideration from continuing and discontinued operations. |
About Ziff Davis
Ziff Davis, Inc. (NASDAQ: ZD) is a vertically focused digital media and internet company whose portfolio includes leading brands in technology, entertainment, shopping, health, cybersecurity, and martech. For more information, visit www.ziffdavis.com.
“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this Press Release are “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995, including those contained in Vivek Shah’s quote and the “Business Outlook” portion regarding the Company’s expected fiscal 2022 financial performance. These forward-looking statements are based on management’s current expectations or beliefs and are subject to numerous assumptions, risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These factors and uncertainties include, among other items: the Company’s ability to grow advertising revenues, profitability and cash flows; the Company’s ability to make interest and debt payments; the Company’s ability to identify, close and successfully transition acquisitions; subscriber growth and retention; variability of the Company’s revenue based on changing conditions in particular industries and the economy generally; protection of the Company’s proprietary technology or infringement by the Company of intellectual property of others; the risk of losing critical third-party vendors or key personnel; the risks associated with fraudulent activity, system failure or a security breach; risks related to our ability to adhere to our internal controls and procedures; the risk of adverse changes in the U.S. or international regulatory environments, including but not limited to the imposition or increase of taxes or regulatory-related fees; the risk of liability for legal and other claims; and the numerous other factors set forth in Ziff Davis’s (formerly J2 Global, Inc.) filings with the Securities and Exchange Commission (“SEC”). For a more detailed description of the risk factors and uncertainties affecting Ziff Davis, refer to the 2021 Annual Report on Form 10-K filed by Ziff Davis on March 15, 2022, and the other reports filed by Ziff Davis from time-to-time with the SEC, each of which is available at www.sec.gov. The forward-looking statements provided in this press release, including those contained in Vivek Shah’s quote and in the “Business Outlook” portion regarding the Company’s expected fiscal 2022 financial performance are based on limited information available to the Company at this time, which is subject to change. Although management’s expectations may change after the date of this press release, the Company undertakes no obligation to revise or update these statements.
About Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following Adjusted non-GAAP financial measures: Adjusted non-GAAP and Pro Forma net income, Adjusted non-GAAP and Pro Forma net income per diluted share, Adjusted and Pro Forma EBITDA and free cash flow. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
We use these Adjusted non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these Adjusted non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our recurring core business operating results. We believe that both management and investors benefit from referring to these Adjusted non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These Adjusted non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance and liquidity. We believe these Adjusted non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.
For more information on these Adjusted non-GAAP financial measures, please see the appropriate GAAP to Adjusted non-GAAP reconciliation tables included within the attached Exhibit to this press release.
|
ZIFF DAVIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED, IN THOUSANDS) |
|||||||
|
|
June 30, 2022 |
|
December 31, 2021 |
||||
|
ASSETS |
|
|
|
||||
|
Cash and cash equivalents |
$ |
648,290 |
|
|
$ |
694,842 |
|
|
Short-term investments |
|
72,535 |
|
|
|
229,200 |
|
|
Accounts receivable, net of allowances |
|
243,300 |
|
|
|
316,342 |
|
|
Prepaid expenses and other current assets |
|
60,956 |
|
|
|
60,290 |
|
|
Total current assets |
|
1,025,081 |
|
|
|
1,300,674 |
|
|
Long-term investments |
|
128,460 |
|
|
|
122,593 |
|
|
Property and equipment, net |
|
166,152 |
|
|
|
161,209 |
|
|
Operating lease right-of-use assets |
|
48,565 |
|
|
|
55,617 |
|
|
Trade names, net |
|
147,621 |
|
|
|
147,761 |
|
|
Customer relationships, net |
|
248,522 |
|
|
|
275,451 |
|
|
Goodwill |
|
1,603,340 |
|
|
|
1,531,455 |
|
|
Other purchased intangibles, net |
|
140,597 |
|
|
|
149,513 |
|
|
Deferred income taxes, noncurrent |
|
7,321 |
|
|
|
5,917 |
|
|
Other assets |
|
27,436 |
|
|
|
20,090 |
|
|
TOTAL ASSETS |
$ |
3,543,095 |
|
|
$ |
3,770,280 |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
|
Accounts payable and accrued expenses |
$ |
191,922 |
|
|
$ |
226,621 |
|
|
Income taxes payable, current |
|
4,027 |
|
|
|
3,151 |
|
|
Deferred revenue, current |
|
194,522 |
|
|
|
185,571 |
|
|
Operating lease liabilities, current |
|
24,867 |
|
|
|
27,156 |
|
|
Current portion of long-term debt |
|
68,506 |
|
|
|
54,609 |
|
|
Other current liabilities |
|
203 |
|
|
|
130 |
|
|
Total current liabilities |
|
484,047 |
|
|
|
497,238 |
|
|
Long-term debt |
|
1,033,695 |
|
|
|
1,036,018 |
|
|
Deferred revenue, noncurrent |
|
9,246 |
|
|
|
14,839 |
|
|
Operating lease liabilities, noncurrent |
|
43,634 |
|
|
|
53,708 |
|
|
Income taxes payable, noncurrent |
|
11,675 |
|
|
|
11,675 |
|
|
Liability for uncertain tax positions |
|
43,597 |
|
|
|
42,546 |
|
|
Deferred income taxes |
|
88,217 |
|
|
|
108,982 |
|
|
Other long-term liabilities |
|
34,788 |
|
|
|
37,542 |
|
|
TOTAL LIABILITIES |
|
1,748,899 |
|
|
|
1,802,548 |
|
|
Commitments and contingencies |
|
— |
|
|
|
— |
|
|
Preferred stock |
|
— |
|
|
|
— |
|
|
Common stock |
|
472 |
|
|
|
474 |
|
|
Additional paid-in capital |
|
426,104 |
|
|
|
509,122 |
|
|
Retained earnings |
|
1,451,316 |
|
|
|
1,515,358 |
|
|
Accumulated other comprehensive loss |
|
(83,696 |
) |
|
|
(57,222 |
) |
|
TOTAL STOCKHOLDERS’ EQUITY |
|
1,794,196 |
|
|
|
1,967,732 |
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
3,543,095 |
|
|
$ |
3,770,280 |
|
|
ZIFF DAVIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED, IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA) |
|||||||||||||||
|
|
Three Months Ended June 30, |
|
Six months ended June 30, |
||||||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Total revenues |
$ |
337,356 |
|
|
$ |
341,293 |
|
|
$ |
652,424 |
|
|
$ |
652,950 |
|
|
Cost of revenues (1) |
|
46,004 |
|
|
|
48,785 |
|
|
|
92,104 |
|
|
|
92,637 |
|
|
Gross profit |
|
291,352 |
|
|
|
292,508 |
|
|
|
560,320 |
|
|
|
560,313 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
|
Sales and marketing (1) |
|
123,777 |
|
|
|
120,421 |
|
|
|
241,539 |
|
|
|
228,372 |
|
|
Research, development and engineering (1) |
|
19,721 |
|
|
|
17,705 |
|
|
|
38,148 |
|
|
|
37,380 |
|
|
General and administrative (1) |
|
101,967 |
|
|
|
111,698 |
|
|
|
204,184 |
|
|
|
224,996 |
|
|
Goodwill impairment on business |
|
— |
|
|
|
32,629 |
|
|
|
— |
|
|
|
32,629 |
|
|
Total operating expenses |
|
245,465 |
|
|
|
282,453 |
|
|
|
483,871 |
|
|
|
523,377 |
|
|
Income from operations |
|
45,887 |
|
|
|
10,055 |
|
|
|
76,449 |
|
|
|
36,936 |
|
|
Interest expense, net |
|
(6,956 |
) |
|
|
(21,013 |
) |
|
|
(18,466 |
) |
|
|
(42,490 |
) |
|
Gain on sale of businesses |
|
— |
|
|
|
823 |
|
|
|
— |
|
|
|
2,802 |
|
|
Loss on investments, net |
|
(48,243 |
) |
|
|
(16,677 |
) |
|
|
(48,243 |
) |
|
|
(16,677 |
) |
|
Unrealized loss on short-term investments |
|
(27,317 |
) |
|
|
— |
|
|
|
(18,366 |
) |
|
|
— |
|
|
Other income (loss), net |
|
6,345 |
|
|
|
(816 |
) |
|
|
8,744 |
|
|
|
(573 |
) |
|
(Loss) income from continuing operations before income taxes and (loss) income from equity method investment, net |
|
(30,284 |
) |
|
|
(27,628 |
) |
|
|
118 |
|
|
|
(20,002 |
) |
|
Income tax expense (benefit) |
|
10,051 |
|
|
|
(10,334 |
) |
|
|
15,131 |
|
|
|
(17,218 |
) |
|
(Loss) income from equity method investment, net |
|
(6,101 |
) |
|
|
(5,751 |
) |
|
|
(6,886 |
) |
|
|
18,519 |
|
|
Net (loss) income from continuing operations |
|
(46,436 |
) |
|
|
(23,045 |
) |
|
|
(21,899 |
) |
|
|
15,735 |
|
|
Income from discontinued operations, net of income taxes |
|
— |
|
|
|
38,762 |
|
|
|
— |
|
|
|
77,905 |
|
|
Net (loss) income |
$ |
(46,436 |
) |
|
$ |
15,717 |
|
|
$ |
(21,899 |
) |
|
$ |
93,640 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net (loss) income per common share from continuing operations: |
|
|
|
|
|
|
|
||||||||
|
Basic |
$ |
(0.99 |
) |
|
$ |
(0.52 |
) |
|
$ |
(0.47 |
) |
|
$ |
0.35 |
|
|
Diluted |
$ |
(0.99 |
) |
|
$ |
(0.52 |
) |
|
$ |
(0.47 |
) |
|
$ |
0.33 |
|
|
Net income per common share from discontinued operations: |
|
|
|
|
|
|
|
||||||||
|
Basic |
$ |
— |
|
|
$ |
0.87 |
|
|
$ |
— |
|
|
$ |
1.75 |
|
|
Diluted |
$ |
— |
|
|
$ |
0.87 |
|
|
$ |
— |
|
|
$ |
1.65 |
|
|
Net (loss) income per common share: |
|
|
|
|
|
|
|
||||||||
|
Basic |
$ |
(0.99 |
) |
|
$ |
0.35 |
|
|
$ |
(0.47 |
) |
|
$ |
2.10 |
|
|
Diluted |
$ |
(0.99 |
) |
|
$ |
0.35 |
|
|
$ |
(0.47 |
) |
|
$ |
1.98 |
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||||||
|
Basic |
|
46,978,709 |
|
|
|
44,613,533 |
|
|
|
47,016,351 |
|
|
|
44,506,933 |
|
|
Diluted |
|
46,978,709 |
|
|
|
44,613,533 |
|
|
|
47,016,351 |
|
|
|
47,130,979 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
(1) Includes share-based compensation expense as follows: |
|
|
|
|
|
|
|
||||||||
|
Cost of revenues |
$ |
142 |
|
|
$ |
67 |
|
|
$ |
226 |
|
|
$ |
150 |
|
|
Sales and marketing |
|
1,106 |
|
|
|
278 |
|
|
|
1,675 |
|
|
|
544 |
|
|
Research, development and engineering |
|
852 |
|
|
|
458 |
|
|
|
1,481 |
|
|
|
876 |
|
|
General and administrative |
|
5,603 |
|
|
|
5,066 |
|
|
|
11,038 |
|
|
|
10,029 |
|
|
Total |
$ |
7,703 |
|
|
$ |
5,869 |
|
|
$ |
14,420 |
|
|
$ |
11,599 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
ZIFF DAVIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED, IN THOUSANDS) |
|||||||
|
|
Six Months Ended June 30, |
||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
Cash flows from operating activities: |
|
|
|
||||
|
Net (loss) income |
$ |
(21,899 |
) |
|
$ |
93,640 |
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
||||
|
Depreciation and amortization |
|
118,943 |
|
|
|
130,226 |
|
|
Amortization of financing costs and discounts |
|
1,398 |
|
|
|
14,058 |
|
|
Non-cash operating lease costs |
|
5,913 |
|
|
|
6,714 |
|
|
Share-based compensation |
|
14,420 |
|
|
|
12,363 |
|
|
Provision for credit losses on accounts receivable |
|
(1,376 |
) |
|
|
4,329 |
|
|
Deferred income taxes, net |
|
(10,266 |
) |
|
|
(11,853 |
) |
|
Gain on extinguishment of debt, net |
|
(1,393 |
) |
|
|
— |
|
|
Gain on sale of businesses |
|
— |
|
|
|
(2,802 |
) |
|
Lease asset impairments and other charges |
|
168 |
|
|
|
7,829 |
|
|
Changes in fair value of contingent consideration |
|
(9 |
) |
|
|
562 |
|
|
Foreign currency remeasurement gain |
|
549 |
|
|
|
415 |
|
|
Loss (income) from equity method investments |
|
6,886 |
|
|
|
(18,519 |
) |
|
Unrealized loss on short-term investments |
|
18,366 |
|
|
|
— |
|
|
Loss on investments, net |
|
48,243 |
|
|
|
16,677 |
|
|
Decrease (increase) in: |
|
|
|
||||
|
Accounts receivable |
|
77,168 |
|
|
|
65,312 |
|
|
Prepaid expenses and other current assets |
|
5,804 |
|
|
|
(7,720 |
) |
|
Operating lease right-of-use assets |
|
2,260 |
|
|
|
689 |
|
|
Other assets |
|
(7,250 |
) |
|
|
(701 |
) |
|
Increase (decrease) in: |
|
|
|
||||
|
Accounts payable and accrued expenses |
|
(45,329 |
) |
|
|
(23,438 |
) |
|
Income taxes payable |
|
8,825 |
|
|
|
(15,123 |
) |
|
Deferred revenue |
|
(11,882 |
) |
|
|
2,499 |
|
|
Operating lease liabilities |
|
(13,721 |
) |
|
|
(14,218 |
) |
|
Liability for uncertain tax positions |
|
403 |
|
|
|
(3,567 |
) |
|
Other long-term liabilities |
|
(3,737 |
) |
|
|
21 |
|
|
Net cash provided by operating activities |
|
192,484 |
|
|
|
290,022 |
|
|
Cash flows from investing activities: |
|
|
|
||||
|
Proceeds from sale of available-for-sale investments |
|
— |
|
|
|
663 |
|
|
Purchases of equity method investment |
|
— |
|
|
|
(11,053 |
) |
|
Investment in available-for-sale securities |
|
(15,000 |
) |
|
|
— |
|
|
Purchases of property and equipment |
|
(53,876 |
) |
|
|
(57,766 |
) |
|
Purchases of equity investments |
|
— |
|
|
|
(999 |
) |
|
Proceeds from sale of assets |
|
— |
|
|
|
6,033 |
|
|
Acquisition of businesses, net of cash received |
|
(92,425 |
) |
|
|
(89,489 |
) |
|
Net cash used in investing activities |
|
(161,301 |
) |
|
|
(152,611 |
) |
|
Cash flows from financing activities: |
|
|
|
||||
|
Payment of debt |
|
(72,853 |
) |
|
|
(2,802 |
) |
|
Debt issuance cost |
|
— |
|
|
|
— |
|
|
Proceeds from term loan |
|
89,991 |
|
|
|
2,811 |
|
|
Debt extinguishment costs |
|
(756 |
) |
|
|
— |
|
|
Repurchase of common stock |
|
(76,345 |
) |
|
|
(22,934 |
) |
|
Issuance of common stock under employee stock purchase plan |
|
5,235 |
|
|
|
4,232 |
|
|
Exercise of stock options |
|
148 |
|
|
|
1,331 |
|
|
Deferred payments for acquisitions |
|
(7,094 |
) |
|
|
(12,934 |
) |
|
Other |
|
(5 |
) |
|
|
(1,294 |
) |
|
Net cash used in financing activities |
|
(61,679 |
) |
|
|
(31,590 |
) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
(16,056 |
) |
|
|
(616 |
) |
|
Net change in cash and cash equivalents |
|
(46,552 |
) |
|
|
105,205 |
|
|
Cash and cash equivalents at beginning of period |
|
694,842 |
|
|
|
242,652 |
|
|
Cash and cash equivalents at beginning of period associated with discontinued operations |
|
— |
|
|
|
66,210 |
|
|
Cash and cash equivalents at beginning of period associated with continuing operations |
|
694,842 |
|
|
|
176,442 |
|
|
Cash and cash equivalents at end of period |
|
648,290 |
|
|
|
347,857 |
|
|
Cash and cash equivalents at end of period associated with discontinued operations |
|
— |
|
|
|
107,666 |
|
|
Cash and cash equivalents at end of period associated with continuing operations |
$ |
648,290 |
|
|
$ |
240,191 |
|
|
ZIFF DAVIS, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO ADJUSTED NON-GAAP FINANCIAL MEASURES THREE MONTHS ENDED JUNE 30, 2022 AND 2021 (UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
||||||||||||
|
Adjusted non-GAAP net income from continuing operations is GAAP net income from continuing operations with the following modifications: (1) elimination of share-based compensation; (2) elimination of certain acquisition related integration costs; (3) elimination of certain interest costs; (4) elimination of amortization of patents and intangible assets that we acquired; (5) elimination of change in value of investments; (6) elimination of gain/loss on sale of assets; (7) elimination of lease asset impairments and other charges; (8) elimination of disposal related costs and (9) elimination of goodwill impairment on business. |
||||||||||||
|
|
Three months ended June 30, |
|||||||||||
|
|
|
2022 |
|
Per diluted share* |
|
2021 |
|
Per diluted share* |
||||
|
Net loss from continuing operations |
$ |
(46,436 |
) |
$ |
(0.99 |
) |
$ |
(23,045 |
) |
$ |
(0.52 |
) |
|
Plus: |
|
|
|
|
||||||||
|
Share based compensation (1) |
|
6,798 |
|
|
0.14 |
|
|
3,815 |
|
|
0.09 |
|
|
Acquisition related integration costs (2) |
|
2,627 |
|
|
0.06 |
|
|
872 |
|
|
0.02 |
|
|
Interest costs (3) |
|
(2,226 |
) |
|
(0.05 |
) |
|
4,761 |
|
|
0.11 |
|
|
Amortization (4) |
|
32,064 |
|
|
0.68 |
|
|
34,159 |
|
|
0.77 |
|
|
Investments (5) |
|
80,485 |
|
|
1.71 |
|
|
18,490 |
|
|
0.41 |
|
|
Sale of assets (6) |
|
— |
|
|
— |
|
|
(823 |
) |
|
(0.02 |
) |
|
Lease asset impairments and other charges (7) |
|
808 |
|
|
0.02 |
|
|
4,665 |
|
|
0.10 |
|
|
Disposal related costs (8) |
|
305 |
|
|
0.01 |
|
|
(421 |
) |
|
(0.01 |
) |
|
Goodwill impairment on business (9) |
|
— |
|
|
— |
|
|
24,635 |
|
|
0.55 |
|
|
Adjusted non-GAAP net income from continuing operations |
$ |
74,425 |
|
$ |
1.58 |
|
$ |
67,108 |
|
$ |
1.50 |
|
| ____________________ | ||||||||||||
|
* The reconciliation of net income from continuing operations per diluted share from GAAP to Adjusted non-GAAP net income from continuing operations per share may not foot since each is calculated independently. |
||||||||||||
Contacts
Rebecca Wright
Ziff Davis, Inc.
800-577-1790
investor@ziffdavis.com
