NEW YORK–(BUSINESS WIRE)–Ziff Davis, Inc. (NASDAQ: ZD) (“Ziff Davis”) today reported unaudited financial results for the fourth quarter and year ended December 31, 2022.
“Delivering bottom-line growth in Q4 and throughout 2022 is impressive given the challenges in the advertising market and the overall tech sector,” said Vivek Shah, Chief Executive Officer of Ziff Davis. “While we’ve been judicious in our spending, we continue to confidently pursue organic growth and seek compelling investment choices for our capital.”
FOURTH 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 months and year ended December 31, 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, which are on a combined continuing and discontinued operations basis(1).
Q4 2022 quarterly revenues decreased 2.9% to $396.7 million compared to $408.6 million for Q4 2021.
Net income from continuing operations decreased to $69.2 million compared to $378.9 million for Q4 2021 primarily due to the unrealized gain on investment of $298.5 million recorded during the three months ended December 31, 2021 in connection with the Company’s investment in Consensus that did not recur.
Adjusted net income from continuing operations(2) increased by 0.9% to $106.0 million compared to $105.1 million for Q4 2021.
Net income per diluted share from continuing operations(3) decreased to $1.37 in Q4 2022 compared to $7.81 for Q4 2021. The decrease is primarily driven by the unrealized gain on investment of $298.5 million ($6.15 per share, after tax) recorded during the three months ended December 31, 2021 in connection with the Company’s investment in Consensus that did not recur.
Adjusted net income per diluted share from continuing operations(3)(4) (or “Adjusted diluted EPS”) for the quarter increased 3.7% to $2.26 compared to $2.18 for Q4 2021.
Adjusted EBITDA(5) for the quarter increased 4.1% to $168.3 million compared to $161.6 million for Q4 2021.
Net cash provided by operating activities from continuing and discontinued operations was $43.2 million in Q4 2022 compared to $86.3 million in Q4 2021. Free cash flow from continuing and discontinued operations(6) was $17.8 million in Q4 2022 compared to $60.0 million in Q4 2021.
Ziff Davis ended the quarter with approximately $839.1 million in cash, cash equivalents, and investments after deploying approximately $1.4 million during the quarter for prior year acquisitions. No funds were deployed in Q4 2022 for current year acquisitions.
Key unaudited financial results for Q4 2022 versus Q4 2021 are set forth in the following table (in millions, except per share amounts). Reconciliations of Adjusted net income per diluted share from continuing operations, Adjusted EBITDA and Free cash flow from continuing and discontinued operations(1) to their nearest comparable GAAP financial measures are presented in the attached schedules.
The following table reflects Actual Results from Continuing Operations, except for Cash provided by operating activities and Free Cash Flow, which are on a combined basis of continuing operations and discontinued operations(1), for the fourth quarter of 2022 and 2021 (in millions, except per share amounts).
|
|
Actual Results |
||
|
|
Three months ended December 31, |
||
|
2022 |
2021 |
% Change |
|
|
Revenues |
|
|
|
|
Digital Media |
$321.7 |
$325.7 |
(1.2)% |
|
Cybersecurity and Martech |
$75.0 |
$82.9 |
(9.5)% |
|
Total revenue (7) |
$396.7 |
$408.6 |
(2.9)% |
|
Income from operations |
$93.5 |
$85.4 |
9.5% |
|
Operating income margin |
23.6% |
20.9% |
2.7% |
|
Net income from continuing operations |
$69.2 |
$378.9 |
(81.7)% |
|
Adjusted net income from continuing operations |
$106.0 |
$105.1 |
0.9% |
|
Net income per diluted share from continuing operations (3) |
$1.37 |
$7.81 |
(82.5)% |
|
Adjusted diluted EPS (3) (4) |
$2.26 |
$2.18 |
3.7% |
|
Adjusted EBITDA (5) |
$168.3 |
$161.6 |
4.1% |
|
Adjusted EBITDA margin (5) |
42.4% |
39.5% |
2.9% |
|
Net cash provided by operating activities from continuing and discontinued operations (6) |
$43.2 |
$86.3 |
(49.9)% |
|
Free cash flow from continuing and discontinued operations (1)(6) |
$17.8 |
$60.0 |
(70.3)% |
FULL YEAR 2022 HIGHLIGHTS
2022 revenues decreased 1.8% to $1.39 billion compared to $1.42 billion for 2021. Excluding divested businesses(8), 2022 revenues increased 0.6% to $1.39 billion as compared to $1.38 billion for 2021.
Net income from continuing operations decreased to $65.5 million compared to $401.4 million for 2021 primarily due to an unrealized gain on investment of $298.5 million in the prior year recorded in connection with the Company’s investment in Consensus that did not recur.
Adjusted net income from continuing operations(2) increased by 5.0% to $312.6 million as compared to $297.7 million for 2021. Excluding divested businesses(8), Adjusted net income from continuing operations increased by 8.8% to $312.6 million as compared to $287.4 million for 2021.
Net income per diluted share(3) from continuing operations decreased to $1.39 in 2022 compared to $8.38 for 2021. The net income decrease was primarily due to an unrealized gain on investment of $298.5 million ($6.24 per share, after tax) in the prior year recorded in connection with the Company’s investment in Consensus that did not recur.
Adjusted diluted EPS(3)(4) for the year increased by 3.3% to $6.65 compared to $6.44 for 2021. Excluding divested businesses(8), Adjusted diluted EPS(3)(4) for the year increased 7.1% to $6.65 as compared to $6.21 for 2021.
Adjusted EBITDA(5) for the year increased 1.6% to $507.2 million compared to $499.0 million for 2021. Excluding divested businesses(8), Adjusted EBITDA(5) for the year increased 4.6% to $507.2 million compared to $484.9 million for 2021.
Net cash provided by operating activities from continuing and discontinued operations was $336.4 million during 2022 compared to $516.5 million in 2021. Free cash flow from continuing and discontinued operations(6) was $230.3 million during 2022 compared to $403.5 million in 2021.
The following table reflects Actual Results from Continuing Operations and Results from Continuing Operations excluding divested businesses, except for Cash provided by operating activities and Free Cash Flow, which are on a combined basis of continuing operations and discontinued operations, for the years ended December 31, 2022 and 2021 (in millions, except per share amounts). Results from Continuing Operations excluding divested businesses below exclude the operating results from Voice assets in the United Kingdom that were sold in February 2021 and the Company’s B2B Backup business that was sold in September 2021.
|
|
Actual Results |
Results excluding divested businesses(8) |
||||
|
Year ended December 31, |
Year ended December 31, |
|||||
|
|
2022 |
2021 |
% Change |
2022 |
2021 |
% Change |
|
Revenues |
|
|
|
|
|
|
|
Digital Media |
$1,078.4 |
$1,068.5 |
0.9% |
$1,078.4 |
$1,068.5 |
0.9% |
|
Cybersecurity and Martech |
$312.6 |
$348.2 |
(10.2)% |
$312.6 |
$314.7 |
(0.7)% |
|
Total revenue (7) |
$1,391.0 |
$1,416.7 |
(1.8)% |
$1,391.0 |
$1,383.2 |
0.6% |
|
Income from operations |
$198.9 |
$167.3 |
18.9% |
|
|
|
|
Operating income margin |
14.3% |
11.8% |
2.5% |
|
|
|
|
Net income from continuing operations |
$65.5 |
$401.4 |
(83.7)% |
|
|
|
|
Adjusted net income from continuing operations |
$312.6 |
$297.7 |
5.0% |
$312.6 |
$287.4 |
8.8% |
|
Net income per diluted share from continuing operations (3) |
$1.39 |
$8.38 |
(83.4)% |
|
|
|
|
Adjusted diluted EPS (3) (4) |
$6.65 |
$6.44 |
3.3% |
$6.65 |
$6.21 |
7.1% |
|
Adjusted EBITDA (5) |
$507.2 |
$499.0 |
1.6% |
$507.2 |
$484.9 |
4.6% |
|
Adjusted EBITDA margin (5) |
36.5% |
35.2% |
1.3% |
36.5% |
35.1% |
1.4% |
|
Net cash provided by operating activities from continuing operations (6) |
$336.4 |
$516.5 |
(34.9)% |
|
|
|
|
Free cash flow from continuing and discontinued operations (1)(6) |
$230.3 |
$403.5 |
(42.9)% |
|
|
|
ZIFF DAVIS GUIDANCE
The Company’s full year 2023 outlook is as follows (in millions, except per share data):
|
|
2022 Actual |
|
2023 Range of Estimates |
|
Growth (Decline) |
|||||||||
|
|
(unaudited) |
|
Low |
|
High |
|
Low |
|
High |
|||||
|
Revenue |
$ |
1,391.0 |
|
$ |
1,350.0 |
|
$ |
1,408.0 |
|
(2.9 |
)% |
|
1.2 |
% |
|
Adjusted EBITDA |
$ |
507.2 |
|
$ |
479.0 |
|
$ |
514.0 |
|
(5.6 |
)% |
|
1.3 |
% |
|
Adjusted diluted EPS* |
$ |
6.65 |
|
$ |
6.02 |
|
$ |
6.54 |
|
(9.5 |
)% |
|
(1.7 |
)% |
* Adjusted diluted EPS for 2023 excludes share based compensation ranging between $28 million and $30 million, amortization of acquired intangibles and the impact of any currently unanticipated items, in each case net of tax. It is anticipated that Adjusted effective tax rate for 2023 (exclusive of the release of reserves for uncertain tax positions) will be between 23.0% and 25.0%.
Notes:
|
(1) |
|
For the three months and year ended December 31, 2022, the Loss from discontinued operations, net of income taxes did not have an impact on Net cash provided by operating activities from continuing and discontinued operations. |
|
(2) |
|
Adjusted net income from continuing operations is Net income from continuing operations with modifications due to the items used to reconcile GAAP to non-GAAP financial measures, as defined further in this Press Release. |
|
(3) |
|
The estimated GAAP effective tax rates were approximately 27.0% and 1.6% for the three months ended December 31, 2022 and 2021, respectively, and 44.2% and (4.0)% for the years ended December 31, 2022 and 2021, respectively. The estimated Adjusted effective tax rates were approximately 23.2% and 23.2% for the three months ended December 31, 2022 and 2021, respectively, and 22.9% and 23.2% for the years ended December 31, 2022 and 2021, respectively. |
|
(4) |
|
Adjusted diluted EPS excludes certain non-GAAP items, as defined in the Reconciliation of GAAP to non-GAAP financial measures. For the three months ended December 31, 2022 and 2021, excluded non-GAAP items totaled $0.89 and $(5.63) per diluted share, respectively. For the years ended December 31, 2022 and 2021, excluded non-GAAP items totaled $5.26 and $(1.94) per diluted share, respectively. |
|
(5) |
|
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 held at the reporting date; other income (expense), net; income tax (expense) benefit; (loss) income from equity method investments, net; depreciation and amortization; and the items used to reconcile GAAP to non-GAAP financial measures, as defined in the Reconciliation of GAAP to Adjusted financial measures. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Revenue. Adjusted EBITDA and Adjusted EBITDA margin amounts are not meant as a substitute for financial information prepared in accordance with GAAP, but are solely for informational purposes. |
|
(6) |
|
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. Free cash flow from continuing and discontinued operations amounts are not meant as a substitute for GAAP, but are solely for informational purposes. |
|
(7) |
|
The revenues associated with each of the businesses may not foot precisely since each is presented independently. |
|
(8) |
|
Excluding divested businesses figures are provided taking into consideration the sale of certain Voice assets in the United Kingdom in February 2021 as well as the sale of the Company’s B2B Backup business in September 2021 as if they had occurred in a prior period presented. |
About Ziff Davis
Ziff Davis, Inc. (NASDAQ: ZD) is a vertically focused digital media and internet company whose portfolio includes leading brands in technology, shopping, gaming and entertainment, connectivity, 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 “Ziff Davis Guidance” portion regarding the Company’s expected fiscal 2023 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 risks related to supply chain disruptions, inflationary conditions and rising interest rates; the risk of liability for legal and other claims; and the numerous other factors set forth in Ziff Davis’ 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 “Ziff Davis Guidance” 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 condensed consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (“GAAP”), we use the following non-GAAP financial measures: Revenues excluding divested businesses, Adjusted diluted EPS and Adjusted diluted EPS excluding divested business, Adjusted net income from continuing operations and Adjusted net income from continuing operations excluding divested businesses, Adjusted EBITDA and Adjusted EBITDA excluding divested businesses, Adjusted EBITDA margin and Adjusted EBITDA margin excluding divested businesses, and Free cash flow from continuing and discontinued operations. 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 non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. We believe that these 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 non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance and liquidity. We believe these 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 non-GAAP financial measures, please see the appropriate GAAP to Adjusted reconciliation tables that are presented in the attached schedules.
|
ZIFF DAVIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED, IN THOUSANDS) |
|||||||
|
|
December 31, |
||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
ASSETS |
|
|
|
||||
|
Cash and cash equivalents |
$ |
652,793 |
|
|
$ |
694,842 |
|
|
Short-term investments |
|
58,421 |
|
|
|
229,200 |
|
|
Accounts receivable, net of allowances |
|
304,739 |
|
|
|
316,342 |
|
|
Prepaid expenses and other current assets |
|
68,319 |
|
|
|
60,290 |
|
|
Total current assets |
|
1,084,272 |
|
|
|
1,300,674 |
|
|
Long-term investments |
|
127,871 |
|
|
|
122,593 |
|
|
Property and equipment, net |
|
178,184 |
|
|
|
161,209 |
|
|
Operating lease right-of-use assets |
|
40,640 |
|
|
|
55,617 |
|
|
Trade names, net |
|
136,192 |
|
|
|
147,761 |
|
|
Customer relationships, net |
|
208,057 |
|
|
|
275,451 |
|
|
Goodwill |
|
1,591,474 |
|
|
|
1,531,455 |
|
|
Other purchased intangibles, net |
|
118,566 |
|
|
|
149,513 |
|
|
Deferred income taxes, noncurrent |
|
8,523 |
|
|
|
5,917 |
|
|
Other assets |
|
39,491 |
|
|
|
20,090 |
|
|
TOTAL ASSETS |
$ |
3,533,270 |
|
|
$ |
3,770,280 |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
|
Accounts payable and accrued expenses |
$ |
202,546 |
|
|
$ |
226,621 |
|
|
Income taxes payable, current |
|
19,712 |
|
|
|
3,151 |
|
|
Deferred revenue, current |
|
187,904 |
|
|
|
185,571 |
|
|
Current portion of long-term debt |
|
— |
|
|
|
54,609 |
|
|
Operating lease liabilities, current |
|
22,153 |
|
|
|
27,156 |
|
|
Other current liabilities |
|
133 |
|
|
|
130 |
|
|
Total current liabilities |
|
432,448 |
|
|
|
497,238 |
|
|
Long-term debt |
|
999,053 |
|
|
|
1,036,018 |
|
|
Deferred revenue, noncurrent |
|
9,103 |
|
|
|
14,839 |
|
|
Operating lease liabilities, noncurrent |
|
33,996 |
|
|
|
53,708 |
|
|
Income taxes payable, noncurrent |
|
11,675 |
|
|
|
11,675 |
|
|
Liability for uncertain tax positions |
|
40,379 |
|
|
|
42,546 |
|
|
Deferred income taxes |
|
79,007 |
|
|
|
108,982 |
|
|
Other long-term liabilities |
|
34,998 |
|
|
|
37,542 |
|
|
TOTAL LIABILITIES |
|
1,640,659 |
|
|
|
1,802,548 |
|
|
|
|
|
|
||||
|
Common stock |
|
473 |
|
|
|
474 |
|
|
Additional paid-in capital |
|
439,681 |
|
|
|
509,122 |
|
|
Retained earnings |
|
1,537,830 |
|
|
|
1,515,358 |
|
|
Accumulated other comprehensive loss |
|
(85,373 |
) |
|
|
(57,222 |
) |
|
TOTAL STOCKHOLDERS’ EQUITY |
|
1,892,611 |
|
|
|
1,967,732 |
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
3,533,270 |
|
|
$ |
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 December 31, |
|
Year ended December 31, |
||||||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Total revenues |
$ |
396,700 |
|
|
$ |
408,628 |
|
|
$ |
1,390,997 |
|
|
$ |
1,416,722 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
|
Cost of revenues (1) |
|
50,847 |
|
|
|
45,718 |
|
|
|
195,554 |
|
|
|
188,053 |
|
|
Sales and marketing (1) |
|
129,764 |
|
|
|
138,100 |
|
|
|
490,777 |
|
|
|
493,049 |
|
|
Research, development and engineering (1) |
|
18,210 |
|
|
|
21,875 |
|
|
|
74,093 |
|
|
|
78,874 |
|
|
General and administrative (1) |
|
104,421 |
|
|
|
117,541 |
|
|
|
404,263 |
|
|
|
456,777 |
|
|
Goodwill impairment on business |
|
— |
|
|
|
— |
|
|
|
27,369 |
|
|
|
32,629 |
|
|
Total operating expenses |
|
303,242 |
|
|
|
323,234 |
|
|
|
1,192,056 |
|
|
|
1,249,382 |
|
|
Income from operations |
|
93,458 |
|
|
|
85,394 |
|
|
|
198,941 |
|
|
|
167,340 |
|
|
Interest expense, net |
|
(5,423 |
) |
|
|
(15,043 |
) |
|
|
(33,842 |
) |
|
|
(72,023 |
) |
|
(Loss) gain on debt extinguishment, net |
|
— |
|
|
|
(5,274 |
) |
|
|
11,505 |
|
|
|
(5,274 |
) |
|
Loss on sale of businesses, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(21,798 |
) |
|
Gain (loss) on investments, net |
|
1,029 |
|
|
|
— |
|
|
|
(46,743 |
) |
|
|
(16,677 |
) |
|
Unrealized gain (loss) on short-term investments held at the reporting date, net |
|
7,020 |
|
|
|
298,490 |
|
|
|
(7,145 |
) |
|
|
298,490 |
|
|
Other (expense) income, net |
|
(4,525 |
) |
|
|
1,759 |
|
|
|
8,437 |
|
|
|
1,293 |
|
|
Income from continuing operations before income tax (expense) benefit and changes from equity method investment |
|
91,559 |
|
|
|
365,326 |
|
|
|
131,153 |
|
|
|
351,351 |
|
|
Income tax (expense) benefit |
|
(24,726 |
) |
|
|
(5,684 |
) |
|
|
(57,957 |
) |
|
|
14,199 |
|
|
Income (loss) from equity method investment, net |
|
2,347 |
|
|
|
19,249 |
|
|
|
(7,730 |
) |
|
|
35,845 |
|
|
Net income from continuing operations |
|
69,180 |
|
|
|
378,891 |
|
|
|
65,466 |
|
|
|
401,395 |
|
|
(Loss) income from discontinued operations, net of income taxes |
|
(1,709 |
) |
|
|
(18,385 |
) |
|
|
(1,709 |
) |
|
|
95,319 |
|
|
Net income |
$ |
67,471 |
|
|
$ |
360,506 |
|
|
$ |
63,757 |
|
|
$ |
496,714 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net income per common share from continuing operations: |
|
|
|
|
|
|
|
||||||||
|
Basic |
$ |
1.47 |
|
|
$ |
7.93 |
|
|
$ |
1.39 |
|
|
$ |
8.74 |
|
|
Diluted |
$ |
1.37 |
|
|
$ |
7.81 |
|
|
$ |
1.39 |
|
|
$ |
8.38 |
|
|
Net (loss) income per common share from discontinued operations: |
|
|
|
|
|
|
|
||||||||
|
Basic |
$ |
(0.04 |
) |
|
$ |
(0.38 |
) |
|
$ |
(0.04 |
) |
|
$ |
2.08 |
|
|
Diluted |
$ |
(0.03 |
) |
|
$ |
(0.38 |
) |
|
$ |
(0.04 |
) |
|
$ |
1.99 |
|
|
Net income per common share: |
|
|
|
|
|
|
|
||||||||
|
Basic |
$ |
1.44 |
|
|
$ |
7.54 |
|
|
$ |
1.36 |
|
|
$ |
10.81 |
|
|
Diluted |
$ |
1.34 |
|
|
$ |
7.43 |
|
|
$ |
1.36 |
|
|
$ |
10.37 |
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||||||
|
Basic |
|
46,915,647 |
|
|
|
47,778,545 |
|
|
|
46,954,558 |
|
|
|
45,893,928 |
|
|
Diluted |
|
52,114,995 |
|
|
|
48,514,588 |
|
|
|
47,025,849 |
|
|
|
47,862,745 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
(1) Includes share-based compensation expense as follows: |
|
|
|
|
|
|
|
||||||||
|
Cost of revenues |
$ |
52 |
|
|
$ |
86 |
|
|
$ |
341 |
|
|
$ |
306 |
|
|
Sales and marketing |
|
636 |
|
|
|
410 |
|
|
|
3,083 |
|
|
|
1,288 |
|
|
Research, development and engineering |
|
455 |
|
|
|
594 |
|
|
|
2,503 |
|
|
|
1,984 |
|
|
General and administrative |
|
4,652 |
|
|
|
5,037 |
|
|
|
20,674 |
|
|
|
20,551 |
|
|
Total |
$ |
5,795 |
|
|
$ |
6,127 |
|
|
$ |
26,601 |
|
|
$ |
24,129 |
|
|
ZIFF DAVIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED, IN THOUSANDS) |
|||||||
|
|
Year ended December 31, |
||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
Cash flows from operating activities: |
|
|
|
||||
|
Net income |
$ |
63,757 |
|
|
$ |
496,714 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
|
Depreciation and amortization |
|
233,400 |
|
|
|
258,303 |
|
|
Amortization of financing costs and discounts |
|
2,692 |
|
|
|
26,090 |
|
|
Non-cash operating lease costs |
|
13,412 |
|
|
|
1,485 |
|
|
Share-based compensation |
|
26,601 |
|
|
|
25,248 |
|
|
Provision for credit losses (benefit) on accounts receivable |
|
(255 |
) |
|
|
8,738 |
|
|
Deferred income taxes, net |
|
(12,991 |
) |
|
|
(13,433 |
) |
|
(Gain) loss on extinguishment of debt, net |
|
(11,505 |
) |
|
|
14,024 |
|
|
Loss on sale of businesses |
|
— |
|
|
|
21,798 |
|
|
Goodwill impairment on business |
|
27,369 |
|
|
|
32,629 |
|
|
Changes in fair value of contingent consideration |
|
(2,575 |
) |
|
|
(1,223 |
) |
|
Loss (income) from equity method investments |
|
7,730 |
|
|
|
(35,845 |
) |
|
Unrealized loss (gain) on short-term investments held at the reporting date |
|
7,145 |
|
|
|
(281,527 |
) |
|
Loss on investment, net |
|
46,743 |
|
|
|
— |
|
|
Other |
|
945 |
|
|
|
12,894 |
|
|
Decrease (increase) in: |
|
|
|
||||
|
Accounts receivable |
|
14,948 |
|
|
|
(18,050 |
) |
|
Prepaid expenses and other current assets |
|
9,665 |
|
|
|
(15,650 |
) |
|
Operating lease right-of-use assets |
|
3,739 |
|
|
|
15,267 |
|
|
Other assets |
|
(19,979 |
) |
|
|
(3,824 |
) |
|
Increase (decrease) in: |
|
|
|
||||
|
Accounts payable and accrued expenses |
|
(37,569 |
) |
|
|
22,262 |
|
|
Income taxes payable |
|
17,323 |
|
|
|
(21,783 |
) |
|
Deferred revenue |
|
(20,962 |
) |
|
|
14,282 |
|
|
Operating lease liabilities |
|
(27,131 |
) |
|
|
(30,581 |
) |
|
Liability for uncertain tax positions |
|
(2,167 |
) |
|
|
(10,383 |
) |
|
Other long-term liabilities |
|
(3,891 |
) |
|
|
(899 |
) |
|
Net cash provided by operating activities |
|
336,444 |
|
|
|
516,536 |
|
|
Cash flows from investing activities: |
|
|
|
||||
|
Purchases of property and equipment |
|
(106,154 |
) |
|
|
(113,740 |
) |
|
Purchases of intangible assets |
|
(50 |
) |
|
|
(78 |
) |
|
Acquisition of businesses, net of cash received |
|
(104,094 |
) |
|
|
(141,146 |
) |
|
Proceeds from divestiture of discontinued operations |
|
— |
|
|
|
259,104 |
|
|
Proceeds from sale of available-for-sale investments |
|
— |
|
|
|
663 |
|
|
Investment in available-for-sale securities |
|
(15,000 |
) |
|
|
— |
|
|
Distribution from equity method investment |
|
— |
|
|
|
15,327 |
|
|
Purchases of equity method investment |
|
— |
|
|
|
(23,249 |
) |
|
Purchases of equity investments |
|
— |
|
|
|
(999 |
) |
|
Proceeds from sale of equity investments |
|
4,527 |
|
|
|
14,330 |
|
|
Proceeds from sale of businesses, net of cash divested |
|
— |
|
|
|
48,876 |
|
|
Net cash (used in) provided by investing activities |
|
(220,771 |
) |
|
|
59,088 |
|
|
Cash flows from financing activities: |
|
|
|
||||
|
Payment of debt |
|
(166,904 |
) |
|
|
(512,388 |
) |
|
Proceeds from term loan |
|
112,286 |
|
|
|
— |
|
|
Debt extinguishment costs |
|
(756 |
) |
|
|
(1,096 |
) |
|
Proceeds from bridge loan |
|
— |
|
|
|
485,000 |
|
|
Repurchase of common stock |
|
(78,291 |
) |
|
|
(78,327 |
) |
|
Issuance of common stock under employee stock purchase plan |
|
9,431 |
|
|
|
9,231 |
|
|
Proceeds from exercise of stock options |
|
148 |
|
|
|
2,939 |
|
|
Deferred payments for acquisitions |
|
(16,116 |
) |
|
|
(14,387 |
) |
|
Other |
|
(630 |
) |
|
|
(4,060 |
) |
|
Net cash used in financing activities |
|
(140,832 |
) |
|
|
(113,088 |
) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
(16,890 |
) |
|
|
(10,346 |
) |
|
Net change in cash and cash equivalents |
|
(42,049 |
) |
|
|
452,190 |
|
|
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 |
|
652,793 |
|
|
|
694,842 |
|
|
Cash and cash equivalents at end of period associated with discontinued operations |
|
— |
|
|
|
— |
|
|
Cash and cash equivalents at end of period associated with continuing operations |
$ |
652,793 |
|
|
$ |
694,842 |
|
Contacts
Rebecca Wright
Ziff Davis, Inc.
800-577-1790
investor@ziffdavis.com
