Business Context and Reporting Period
Company: Ziff Davis, Inc.
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: June 30, 2026
Business Overview: Ziff Davis is a vertically focused digital media and internet company with reportable segments in Technology & Shopping, Gaming & Entertainment, Health & Wellness, and Cybersecurity & Martech. The reporting period is significantly impacted by the completed sale of its Connectivity business to Accenture Inc. on June 17, 2026, which is now classified as discontinued operations.
Key Financial Metrics
| Metric (in thousands) | Three Months Ended June 30, 2026 |
Six Months Ended June 30, 2026 |
|---|---|---|
| Total Revenues (Continuing Ops) | $286,738 | $554,379 |
| Operating Income (Loss) | $(44,723) | $(41,791) |
| Net Income (Loss) from Continuing Ops | $(52,153) | $(52,928) |
| Net Income from Discontinued Ops | $676,614 | $699,650 |
| Total Net Income | $624,461 | $646,722 |
| Diluted EPS (Total) | $17.16 | $17.49 |
| Cash and Cash Equivalents | $1,606,112 | $1,606,112 |
| Total Debt (Principal) | $872,294 | $872,294 |
| Net Cash Provided by Operating Activities | N/A | $118,916 |
Material Changes vs. Prior Period
- Revenue Decline in Continuing Operations: Total revenues from continuing operations decreased 2.7% year-over-year for the quarter and 2.3% for the six-month period. This was driven primarily by declines in advertising and performance marketing revenues across Technology & Shopping, Gaming & Entertainment, and Health & Wellness segments.
- Goodwill Impairment: The company recorded a non-cash goodwill impairment charge of $54.8 million in the Health & Wellness segment due to declining results and reduced forecasts. This charge significantly impacted operating income and the effective tax rate.
- Discontinued Operations Impact: The sale of the Connectivity business generated a pre-tax gain of approximately $860.6 million, resulting in net income from discontinued operations of $676.6 million for the quarter. This single transaction drove the majority of the reported net income for the period.
- Liquidity Surge: Cash and cash equivalents increased from $573.8 million at year-end 2025 to $1.6 billion at June 30, 2026, primarily due to proceeds from the Connectivity sale ($1.134 billion net of cash divested).
- Share Repurchases: The company repurchased 3.8 million shares for $168.6 million during the six months ended June 30, 2026, under an expanded authorization program.
Guidance, Outlook, and Risks
- Capital Allocation: Management intends to utilize proceeds from the Connectivity sale for general corporate purposes and capital allocation activities, including share repurchases and potential acquisitions.
- Segment Performance:
- Technology & Shopping: Operating loss narrowed due to cost reductions, though revenue declined due to traffic pressures.
- Health & Wellness: Reported an operating loss of $42.3 million for the quarter, primarily due to the $54.8 million goodwill impairment.
- Cybersecurity & Martech: Operating income increased 14.9% year-over-year for the six-month period, driven by other revenue growth from a 2025 acquisition.
- Legal Proceedings: The company is involved in significant litigation, including a lawsuit against OpenAI regarding copyright infringement and a lawsuit against Google/Alphabet regarding antitrust violations. Outcomes are uncertain and could result in monetary damages.
- Tax Legislation: The "One Big Beautiful Bill Act" (OBBBA) signed in July 2025 provides 100% bonus depreciation and immediate deductibility for R&D expenses, expected to reduce current tax liabilities.
- Debt Maturities: $149.1 million of 1.75% Convertible Notes mature in November 2026. The company has sufficient liquidity to service this debt.
Investor Verification Checklist
- Continuing Operations Profitability: Verify the sustainability of operating margins in continuing operations, which reported a loss of $41.8 million for the six months, excluding the one-time gain from discontinued operations.
- Goodwill Impairment Scope: Confirm if the $54.8 million impairment in Health & Wellness is isolated or indicative of broader valuation issues in other segments.
- Revenue Retention: Review segment-specific revenue retention metrics, particularly in Technology & Shopping and Gaming & Entertainment, where advertising revenue declined.
- Debt Refinancing: Assess the company's strategy for the $149.1 million convertible note maturity in late 2026 and potential refinancing costs.
- Legal Exposure: Monitor the status of the OpenAI and Google litigation for potential financial impact or settlement terms.