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Item 8. Financial Statements and Supplementary Data

2025-02-25 compared with 2024-02-26 · 696 added, 793 removed, 1190 unchanged (56% of the section changed)

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

To the Stockholders and the Board of Directors

Ziff Davis, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Ziff Davis, Inc.

and subsidiaries (the Company) as of December 31, 2023, the related consolidated statement of operations, comprehensive income, cash flows, and stockholders’ equity for the year then ended, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with U.S.

We have audited the accompanying consolidated balance sheets of Ziff Davis, Inc.

and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, cash flows, and stockholders’ equity for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with U.S.

generally accepted accounting principles.

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These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Sufficiency of audit evidence over revenue

As discussed in Notes 3 and 18 to the consolidated financial statements, the Company had $1,364,028 thousand in revenues for the year ended December 31, 2023, of which $1,072,971 thousand was within the Digital Media segment, and $291,209 thousand was within the Cyber Security and Martech segment.

Each of these categories of revenue has multiple discrete revenue streams that involve several information technology (IT) applications responsible for the initiation, processing, and recording of revenue transactions.

As discussed in Notes 3 and 17 to the consolidated financial statements, the Company had $1,402 million in revenues for the year ended December 31, 2024.

There are multiple discrete revenue streams that involve several information technology (IT) applications responsible for the initiation, processing, and recording of revenue transactions.

We identified the evaluation of the sufficiency of audit evidence over revenue as a critical audit matter.

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For the revenue streams where procedures were performed, we evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s revenue processes.

We involved IT professionals with specialized skills and knowledge, who assisted in the identification and testing of certain IT systems and related controls that are used by the Company in its revenue recognition processes.

We involved IT professionals with specialized skills and knowledge, who assisted in the identification and testing of certain IT

systems and related controls that are used by the Company in its revenue recognition processes.

For certain revenue streams, we assessed the recorded revenue by selecting a sample of transactions and comparing the amounts recognized for consistency with underlying documentation, including agreements with customers and third-party data.

For other revenue streams, we performed a software-assisted data analysis to test relationships among certain revenue transactions.

For a sample of transactions, we compared the amounts recognized by the Company with underlying documentation, including contracts with customers and cash receipts.

We evaluated the sufficiency of audit evidence obtained over revenue by assessing the results of procedures performed, including the appropriateness of the nature and extent of such evidence.

Evaluation of Goodwill impairment

As discussed in Notes 2 and 8 to the consolidated financial statements, the Company performs goodwill impairment testing on an annual basis or more frequently if indicators of impairment exist.

The Company estimates the fair value of a reporting unit using a weighting of fair values derived from income and market approaches.

If the carrying value of a reporting unit exceeds the reporting unit’s fair value, an impairment loss is recognized for the difference.

As a result of its impairment testing, the Company recorded a goodwill impairment charge for two reporting units within the Technology and Shopping reportable segment, totaling $ 85.3 million for the year ended December 31, 2024.

We identified the evaluation of the fair value used in the goodwill impairment assessment for two reporting units within the Technology and Shopping reportable segment as a critical audit matter.

Subjective auditor judgment was required to evaluate the forecasted revenue growth rate and discount rate used in the income approach for each of the reporting units.

Changes to these assumptions could have had a significant impact on the fair value of the two reporting units within the Technology and Shopping reportable segment.

Additionally, specialized skills and knowledge were required in the evaluation of the discount rates.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company's goodwill impairment process, including the controls related to the Company’s determination of the forecasted revenue growth rate and discount rate for each reporting unit.

We evaluated the forecasted revenue growth rate for each reporting unit by comparing it to the respective reporting unit’s historical revenues, internal communications to management, and other industry market data.

We involved valuation professionals with specialized skills and knowledge who, for each reporting unit, assisted in evaluating:

• the revenue growth rate by comparing it to the growth rates of comparable companies as well as economic and industry data

• the discount rate by comparing it to a discount rate range that was independently developed using publicly available market data for comparable entities and recent acquisitions.

We have served as the Company's auditor since 2023.

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Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Ziff Davis, Inc.

(the “Company”) as of December 31, 2022, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Method Related to Convertible Instruments

As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for convertible instruments due to the adoption of Accounting Standards Update No.

2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entities Own Equity (Subtopic 815-40) effective January 1, 2022 under the modified retrospective approach.

We have audited the accompanying consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows of Ziff Davis, Inc.

(the “Company”) for the year ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations and cash flows of the Company for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ BDO USA, LLP

We believe that our audit provides a reasonable basis for our opinion.

/s/ BDO USA, P.C.

We served as the Company's auditor from 2014 through 2023.

Los Angeles, California

March 1, 2023

March 1, 2023, except for Note 17 which is as of February 25, 2025

ZIFF DAVIS, INC.

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LIABILITIES AND STOCKHOLDERS’ EQUITY

Accounts payable $ 123,256 $ 120,829

Accrued employee related costs 50,068 42,178

Other accrued liabilities 43,612 39,539

Accounts payable and accrued expenses $ 670,769 $ 216,936

Income taxes payable, current 19,715 14,458

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Deferred income taxes 46,018 45,503

Other long-term liabilities 46,666 68,994

Other noncurrent liabilities 47,705 46,666

TOTAL LIABILITIES 1,893,452 1,578,024

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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 3,704,334 $ 3,471,022

See Notes to Consolidated Financial Statements

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(In thousands, except share and per share data)

Year ended December 31,

Years ended December 31,

2024 2023 2022

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Operating costs and expenses:

197,292 195,554 188,053

Direct costs 200,323 185,650 184,546

Sales and marketing 519,694 487,365 490,777

487,365 490,777 493,049

Research, development, and engineering 67,373 68,860 74,093

68,860 74,093 78,874

General, administrative, and other related costs 203,461 195,726 181,871

421,050 404,263 456,777

Goodwill impairment on business 56,850 27,369 32,629

Depreciation and amortization 211,916 236,966 233,400

Goodwill impairment 85,273 56,850 27,369

Total operating costs and expenses 1,288,040 1,231,417 1,192,056

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Interest expense, net ( 13,988 ) ( 20,031 ) ( 33,842 )

Gain (loss) on debt extinguishment, net — 11,505 ( 5,274 )

Gain on debt extinguishment, net — — 11,505

Loss on sale of businesses ( 3,780 ) — —

— — ( 21,798 )

Unrealized (loss) gain on short-term investments held at the reporting date, net ( 28,495 ) ( 7,145 ) 298,490

Gain (loss) on investments, net

357 ( 46,743 ) ( 16,677 )

Other (loss) income, net

( 9,468 ) 8,437 1,293

Income from continuing operations before income tax (expense) benefit and changes from equity method investment 74,974 131,153 351,351

Income tax (expense) benefit ( 24,142 ) ( 57,957 ) 14,199

(Loss) income from equity method investment, net of income taxes ( 9,329 ) ( 7,730 ) 35,845

Loss on investments, net ( 7,654 ) ( 28,138 ) ( 53,888 )

Other income (loss), net 4,968 ( 9,468 ) 8,437

Income from continuing operations before income tax expense and income (loss) from equity method investment 93,194 74,974 131,153

Income tax expense ( 41,370 ) ( 24,142 ) ( 57,957 )

Income (loss) from equity method investment, net of tax 11,223 ( 9,329 ) ( 7,730 )

Net income from continuing operations 63,047 41,503 65,466

(Loss) income from discontinued operations, net of income taxes — ( 1,709 ) 95,319

Loss from discontinued operations, net of tax — — ( 1,709 )

Net income $ 63,047 $ 41,503 $ 63,757

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Diluted $ 1.42 $ 0.89 $ 1.39

Net (loss) income per common share from discontinued operations:

Net loss per common share from discontinued operations:

Basic $ — $ — $ ( 0.04 )

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(In thousands)

Year ended December 31,

Years ended December 31,

2024 2023 2022

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Change in fair value on available-for-sale investments, net of tax expense of $ 514 , $ 16 and $ 0 for the years ended December 31, 2024, 2023 and 2023, respectively

96 272 ( 114 )

Other comprehensive income (loss), net of tax

Other comprehensive (loss) income, net of tax

( 10,851 ) 13,753 ( 28,151 )

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(In thousands)

Year ended December 31,

Years ended December 31,

2024 2023 2022

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Deferred income taxes, net ( 18,822 ) ( 30,017 ) ( 12,991 )

(Gain) loss on extinguishment of debt, net — ( 11,505 ) 14,024

Gain on extinguishment of debt, net — — ( 11,505 )

Loss on sale of businesses 3,780 — —

Goodwill impairment on business 56,850 27,369 32,629

Goodwill impairment 85,273 56,850 27,369

Changes in fair value of contingent consideration — ( 200 ) ( 2,575 )

Loss (income) from equity method investments

(Income) loss from equity method investments

( 11,223 ) 9,329 7,730

Unrealized loss (gain) on short-term investments held at the reporting date 28,495 7,145 ( 298,490 )

(Gain) loss on investment, net ( 357 ) 46,743 16,677

Loss on investment, net 7,654 28,138 53,888

Other 3,601 5,159 3,637

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Increase (decrease) in:

Accounts payable (includes $ 0 , $ 0 and $ 17,635 with related parties)

Accounts payable

171,280 9,419 ( 20,246 )

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Purchases of property and equipment ( 106,635 ) ( 108,729 ) ( 106,154 )

Proceeds on 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 )

Acquisition of businesses, net of cash received ( 217,570 ) ( 9,492 ) ( 104,094 )

Purchase of equity investments — ( 11,858 ) —

Proceeds from sale of equity investments 19,455 3,174 4,527

Acquisition of businesses, net of cash received ( 9,492 ) ( 104,094 ) ( 141,146 )

Investment in available-for-sale securities — — ( 15,000 )

Proceeds from sale of businesses, net of cash divested 7,860 — —

Proceeds from divestiture of discontinued operations — — 259,104

Other ( 565 ) ( 503 ) ( 50 )

Net cash (used in) provided by investing activities ( 127,408 ) ( 220,771 ) 59,088

Net cash used in investing activities ( 297,455 ) ( 127,408 ) ( 220,771 )

Cash flows from financing activities:

Proceeds from bridge loan — — 485,000

Payment of debt ( 134,989 ) — ( 166,904 )

Debt extinguishment costs (includes reimbursement of $ 0 , $ 0 and $ 7,500 with related parties)

— ( 756 ) ( 1,096 )

Proceeds from term loan — — 112,286

Debt extinguishment costs

( 277 ) — ( 756 )

Repurchase of common stock ( 185,181 ) ( 108,527 ) ( 78,291 )

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Cash and cash equivalents at beginning of year 737,612 652,793 694,842

Cash and cash equivalents at beginning of year associated with discontinued operations — — 66,210

Cash and cash equivalents at beginning of year associated with continuing operations 652,793 694,842 176,442

Cash and cash equivalents at end of year 505,880 737,612 652,793

Cash and cash equivalents at end of year associated with discontinued operations — — —

Cash and cash equivalents at end of year associated with continuing operations $ 737,612 $ 652,793 $ 694,842

See Notes to Consolidated Financial Statements

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47,440,137 $ 474 $ 509,122 $ 1,515,358 $ ( 57,222 ) $ 1,967,732

Reclassification of the equity component of 1.75 % Convertible Notes to liability upon adoption of ASU 2020-06

— — ( 88,137 ) 23,436 — ( 64,701 )

Net income — — — 63,757 — 63,757

Other comprehensive income, net of tax expense of zero

Other comprehensive loss, net of tax benefit of zero

— — ( 206 ) 206 ( 32,207 ) ( 32,207 )

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Share-based compensation — — 26,601 — — 26,601

Conversion shares issued as extinguishment cost to redeem 3.25 % Convertible Notes

3,050,850 31 431,921 — — 431,952

Redemption of 3.25 % Convertible Notes, net of tax

— — ( 390,526 ) — — ( 390,526 )

Consensus Separation — — — 261,394 18,966 280,360

Other, net — — 6 ( 3,920 ) 4,056 142

Balance, December 31, 2022 47,269,446 $ 473 $ 439,681 $ 1,537,830 $ ( 85,373 ) $ 1,892,611

Reclassification of the equity component of 1.75 % Convertible Notes to liability upon adoption of ASU 2020-06

— — ( 88,137 ) 23,436 — ( 64,701 )

Net income — — — 41,503 — 41,503

Other comprehensive income, net of tax expense of zero

Other comprehensive income, net of tax expense of $ 16

— — — — 13,753 13,753

Exercise of stock options 5,439 — 148 — — 148

Issuance of restricted stock, net 47,274 — ( 6,220 ) 1,573 — ( 4,647 )

Issuance of shares under employee stock purchase plan 161,488 2 8,725 — — 8,727

Issuance of common stock, net 186,102 2 13,420 — — 13,422

Repurchase and retirement of common stock ( 1,585,846 ) ( 16 ) ( 15,388 ) ( 89,515 ) — ( 104,919 )

( 809,422 ) ( 7 ) ( 17,277 ) ( 61,007 ) — ( 78,291 )

Share-based compensation — — 31,920 — — 31,920

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Net income — — — 63,047 — 63,047

Other comprehensive loss, net of tax expense of $ 16

Other comprehensive loss, net of tax benefit of $ 514

— — — — ( 10,851 ) ( 10,851 )

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Issuance of shares under employee stock purchase plan 174,706 2 8,369 — — 8,371

Issuance of common stock, net 186,102 2 13,420 — — 13,422

Repurchase and retirement of common stock ( 3,500,000 ) ( 35 ) ( 24,973 ) ( 156,822 ) — ( 181,830 )

Share-based compensation — — 40,915 — — 40,915

Increase in fair value of conversion feature on 3.625 % Convertible Notes, net of tax effect of $ 1,000

— — 3,001 — — 3,001

Other, net — — 10 369 — 379

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Ziff Davis, Inc., together with its subsidiaries (“Ziff Davis”, the “Company”, “our”, “us”, or “we”), is a vertically focused digital media and internet company whose portfolio includes brands in technology, shopping, gaming and entertainment, connectivity, health, cybersecurity, and martech.

The Company’s Digital Media business specializes in the technology, shopping, gaming and entertainment, connectivity, and healthcare markets, offering content, tools, and services to consumers and businesses.

The Company’s Cybersecurity and Martech business provides cloud-based subscription services to consumers and businesses including cybersecurity, privacy, and marketing technology.

On October 7, 2021, in connection with the spin-off of its cloud fax business described further below, the Company changed its name from J2 Global, Inc.

to Ziff Davis, Inc.

(for certain events prior to October 7, 2021, the Company may be referred to as J2 Global).

Ziff Davis, Inc., together with its subsidiaries (“Ziff Davis”, “the Company”, “our”, “us”, or “we”), is a vertically focused digital media and internet company whose portfolio includes leading brands in technology, shopping, gaming and entertainment, health and wellness, connectivity, cybersecurity, and martech.

Our business specializes in the technology, shopping, gaming and entertainment, healthcare, and connectivity markets, offering content, tools, and services to consumers and businesses and provides internet-delivered cloud-based services to consumers and businesses including cybersecurity, privacy, and marketing technology.

Basis of Presentation and Summary of Significant Accounting Policies

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(“Consensus”).

On October 7, 2021 (the “Distribution Date”), the Separation was completed and the Company transferred J2 Cloud Service, LLC to Consensus who in turn transferred non-fax assets and liabilities back to Ziff Davis such that Consensus was left with the cloud fax business.

The Separation was achieved through the Company’s distribution of 80.1 % of the shares of Consensus common stock to holders of J2 Global common stock as of the close of business on October 1, 2021, the record date for the distribution.

The Company’s stockholders of record received one share of Consensus common stock for every three shares of J2 Global’s common stock.

On October 8, 2021, Consensus began trading on Nasdaq under the stock symbol “CCSI”.

Ziff Davis, Inc.

retained a 19.9 % interest in Consensus following the Separation (the “Investment in Consensus”).

On October 7, 2021, Consensus paid Ziff Davis approximately $ 259.1 million of cash in a distribution that was anticipated to be tax-free provided certain requirements were met, and issued $ 500.0 million of senior notes due 2028 to Ziff Davis, which Ziff Davis then exchanged with the lenders under the Credit Agreement and Credit Agreement Amendments by and among the subsidiaries of Ziff Davis party thereto as guarantors, Citicorp North America Inc.

and MUFG Union Bank, N.A.

and MUFG Union Bank, N.A., as administrative agent for the lenders, for the extinguishment of indebtedness outstanding under the Bridge Loan Facility.

Refer to Note 10 — Debt for additional details.

Such lenders or their affiliates agreed to resell the 2028 notes to qualified institutional buyers in the United States pursuant to Rule 144A.

The accounting requirements for reporting the Company’s cloud fax business as a discontinued operation were met when the Separation was completed.

Accordingly, the consolidated financial statements reflect the results of the cloud fax business as a discontinued operation for all periods presented.

Ziff Davis did not retain a controlling interest in Consensus.

During the year ended December 31, 2022, the Company entered into a Fifth Amendment and Sixth Amendment to its

During the year ended December 31, 2022, the Company recorded $ 1.7 million in income tax expense within ‘(Loss) income from discontinued operations, net of income taxes’ within the Consolidated Statement of Operations related to the finalization of state tax returns related to the Separation.

Reclassifications

Certain prior year reported amounts have been reclassified to conform to the 2024 presentation.

For the year ended December 31, 2022, the Company reclassified depreciation and amortization of $ 11.0 million and $ 222.4 million from ‘Direct costs’ and ‘General, administrative, and other related costs’, respectively, to ‘Depreciation and amortization’ to conform with current period presentation.

For the year ended December 31, 2023, the Company reclassified depreciation and amortization of $ 11.6 million and $ 225.3 million from ‘Direct costs’ and ‘General, administrative, and other related costs’, respectively, to ‘Depreciation and amortization’ to conform with current period presentation.

Segment Reporting

ASC Topic 280, Segment Reporting (“ASC 280”), establishes standards for the way that public business enterprises report information about operating segments in their annual consolidated financial statements and requires that those enterprises report selected information about operating segments in interim financial reports.

ASC 280 also establishes standards for related disclosures about products and services, geographic areas and major customers.

The Company’s business segments are based on the organization structure used by the chief operating decision maker for making operating and investment decisions and for assessing performance.

Following changes to our internal reporting structure, the Company concluded that it has five operating segments which are now presented as the following five reportable segments:

1) Technology & Shopping, 2) Gaming & Entertainment, 3) Health & Wellness, 4) Connectivity, and 5) Cybersecurity & Martech.

Prior period segment information is presented on a comparable basis to conform to this new segment presentation with no effect on previously reported consolidated results.

Refer to Note 17 — Segment Information for additional detail.

ZIFF DAVIS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

existing Credit Agreement, providing for the issuance of senior secured term loans under the Credit Agreement (the “Term

Loan Facilities”), in an aggregate principal amount of approximately $ 112.3 million.

During the year ended December 31, 2022, the Company subsequently completed non-cash exchanges of 2,800,000 shares of its common stock of Consensus with the lenders under the Fifth and Sixth Amendments to settle the Company’s obligations of $ 112.3 million outstanding aggregate principal amount of the Term Loan Facilities plus related interest.

Refer to Note 10 — Debt for additional details.

As of December 31, 2023, the Company continues to hold approximately 1.0 million shares of the common stock of Consensus.

The Investment in Consensus represents the investment in equity securities for which the Company elected the fair value option and subsequent fair value changes in the Consensus shares are included in the assets of and results from continuing operations.

Refer to Note 5 — Investments and Note 6 — Discontinued Operations and Dispositions for additional information.

Reclassifications

Certain prior year reported amounts have been reclassified to conform to 2023 presentation.

The Company reclassified its trademarks as of December 31, 2022 from ‘other purchased intangibles’ to ‘trade names and trademarks’ to conform to current period presentation.

The trademarks totaled $ 54.8 million of carrying value as of December 31, 2022.

Refer to Note 9 — Goodwill and Intangible Assets for additional information.

Cash and Cash Equivalents

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The carrying amount of cash and cash equivalents either approximates fair value due to the short-term maturity of these instruments or are at fair value.

Accounts Receivable, net

Accounts receivable, net consisted of the following (in thousands):

Settlement receivables, net $ 296,553 $ —

Trade receivables, net 363,670 337,703

Accounts receivable, net $ 660,223 $ 337,703

Settlement receivables, net represent amounts due from third parties that are collected by the Company and passed through to our customers, net of a fee earned by the Company, related to services provided in the facilitation of gift card processing and program management.

Settlement receivables, net is associated with our TDS Gift Cards (“TDS”) business, which was acquired in 2024.

Refer to Note 4 — Business Acquisitions for details.

Allowances for Credit Losses

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The rollforward of allowance for credit losses on Accounts receivable, net is as follows (in thousands):

Year ended December 31,

Years ended December 31,

2024 2023 2022

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The Company accounts for its investments in equity securities in accordance with ASC Topic 321, Investments — Equity Securities (“ASC 321”) which requires the accounting for equity investments, other than those accounted for under the equity method of accounting, generally be measured at fair value for equity securities with readily determinable fair values.

Equity securities without a readily determinable fair value, which are not accounted for under the equity method of accounting, are measured at their cost, less impairment, if any, and adjusted for observable price changes arising from orderly transactions

Any unrealized gains or losses will be reported within earnings on our Consolidated Statements of Operations.

ZIFF DAVIS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

in the same or similar investment from the same issuer.

Any unrealized gains or losses will be reported within earnings on our Consolidated Statements of Operations.

The Company assesses whether an other-than-temporary impairment loss on an investment has occurred due to declines in fair value or other market conditions.

Refer to Note 5 — Investments for additional information.

The Investment in Consensus are equity securities accounted for at fair value under the fair value option, and the related fair value gains and losses are recognized in earnings.

As the initial carrying value of the Investment in Consensus was negative immediately following the Separation, the Company elected the fair value option under ASC 825-10-25 to support the initial recognition of the Investment in Consensus at fair value and the negative book value was recorded as a gain at the date of Separation.

The fair value of Consensus common stock is readily available as Consensus is a publicly traded company.

The Company accounted for its investment in Consensus common stock as an investment in an equity securities, at fair value under the fair value option, and the related fair value gains and losses were recognized in earnings.

The fair value of Consensus common stock was readily available as Consensus is a publicly traded company.

Concentration of Credit Risk

The Company primarily invests its cash, cash equivalents, and marketable securities with major financial institutions primarily within the United States, Canada, United Kingdom, and the European Union.

These investments are made in accordance with the Company’s investment policy with the principal objectives being preservation of capital, fulfillment of liquidity needs, and above market returns commensurate with preservation of capital.

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The Company evaluates its investments in entities in which it is involved to determine if the entity is a VIE and if so, whether it holds a variable interest and is the primary beneficiary.

The Company has determined that it holds a variable interest in its investment as a limited partner in the OCV Fund I, LP (“OCV Fund”, “OCV” or the “Fund”), as well as, another independent corporation.

The Company has concluded that it will not consolidate OCV, as it is not the primary beneficiary of the OCV Fund, and will account for this investment under the equity-method of accounting (see Note 5 — Investments ).

The Company has determined that it holds a variable interest in its investment as a limited partner in the OCV Fund I, LP (“OCV Fund”, “OCV” or the “Fund”), as well as in another independent corporation.

The Company has concluded that it will not consolidate these VIEs, as it is not the primary beneficiary.

OCV qualifies as an investment company under ASC Topic 946, Financial Services, Investment Companies (“ASC 946”).

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The fair value of the Company’s outstanding debt was determined using the quoted market prices of debt instruments with similar terms and maturities when available.

As of the same dates, the carrying value of other long-term liabilities approximated fair value as the related interest rates approximate rates currently available to the Company.

As of the same dates, the carrying value of other noncurrent liabilities approximated fair value as the related interest rates approximate rates currently available to the Company.

Property and Equipment

Property and equipment are stated at cost.

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets and is recorded in direct costs and general, administrative, and other related costs on the Consolidated Statements of Operations based on the function the underlying asset supports.

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets and is recorded in ‘Depreciation and amortization’ on the Consolidated Statements of Operations based on the function the underlying asset supports.

The estimated useful lives of property and equipment range from one to ten years .

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The Company tests goodwill for impairment annually on October 1st at the reporting unit level, or more frequently if indicators of impairment exist, or if a decision is made to dispose of a business.

The Company’s Digital Media reportable segment is comprised of seven reporting units and the Cybersecurity and Martech reportable segment is comprised of two reporting units.

The Company evaluates its goodwill and indefinite-lived intangible assets for impairment pursuant to ASC Topic 350, Intangibles — Goodwill and Other (“ASC 350”), which provides that goodwill and other intangible assets with indefinite lives are not amortized but tested annually for impairment or more frequently if the Company believes indicators of impairment exist.

In connection with the annual impairment test for goodwill, the Company has the option to perform a qualitative assessment in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If the Company determines that it was more likely than not that the fair value of the reporting unit is less than its carrying amount, it then performs an impairment test of goodwill.

The impairment test involves comparing the fair values of the applicable reporting units with their aggregate carrying values, including goodwill.

The Company generally determines the fair value of its reporting units using a mix of an income approach and a market approach.

If the carrying value of a reporting unit exceeds the reporting unit’s fair value, an impairment loss is recognized for the difference.

During the years ended December 31, 2024, 2023, and 2022, the Company recorded goodwill impairments of $ 85.3 million, $ 56.9 million, and $ 27.4 million, respectively.

Refer to Note 8 — Goodwill and Intangible Assets for additional details.

The Company did not have intangible assets with indefinite lives during years ended December 31, 2024, 2023, and 2022.

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Intangible assets resulting from the acquisitions of entities accounted for using the acquisition method of accounting are recorded at the estimated fair value of the assets acquired.

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Other intangible assets subject to amortization are amortized over the period of estimated economic benefit ranging from one to ten years.

Amortization expense of definite-lived intangibles assets is included in general, administrative, and other related costs on the Consolidated Statements of Operations.

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The Company evaluates its goodwill and indefinite-lived intangible assets for impairment pursuant to FASB ASC Topic 350, Intangibles — Goodwill and Other (“ASC 350”), which provides that goodwill and other intangible assets with indefinite lives are not amortized but tested annually for impairment or more frequently if the Company believes indicators of impairment exist.

If the Company determines that it was more likely than not that the fair value of the reporting unit is less than its carrying amount, it then it performs an impairment test of goodwill.

The impairment test involves comparing the fair values of the applicable reporting units with their aggregate carrying values, including goodwill.

The Company generally determines the fair value of its reporting units using a mix of an income approach and a market approach.

If the carrying value of a reporting unit exceeds the reporting unit’s fair value, an impairment loss is recognized for the difference.

During the years ended December 31, 2023, 2022, and 2021 the Company recorded a goodwill impairment of $ 56.9 million, $ 27.4 million, and $ 32.6 million, respectively.

Refer to Note 9 — Goodwill and Intangible Assets for additional details.

The Company performed the annual impairment test for intangible assets with indefinite lives for fiscal 2021 using a qualitative assessment primarily taking into consideration macroeconomic, industry and market conditions, overall financial performance and any other relevant company-specific factors.

The Company concluded that there were no impairments in 2021.

The Company did not perform an assessment in 2022 and 2023, as there were no intangible assets with indefinite lives during 2022 and 2023.

Amortization expense of definite-lived intangibles assets is included in depreciation and amortization on the Consolidated Statements of Operations.

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following (in thousands):

Accounts payable $ 164,352 $ 123,256

Settlement payables, net 408,747 —

Accrued employee related costs 55,800 50,068

Other accrued liabilities 41,870 43,612

Total Accounts payable and accrued expenses $ 670,769 $ 216,936

Settlement payables, net represent amounts owed to our customers related to services provided in the facilitation of gift card processing and program management whereby, as part of our services we collect from third-parties and pass through payment to our customers, net of a fee earned by the Company.

Settlement payables, net is associated with our TDS business, which was acquired in 2024.

Refer to Note 4 — Business Acquisitions for details.

Contingent Consideration

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For each transaction, the Company estimates the fair value of contingent earn-out payments as part of the initial purchase price and records the estimated fair value of contingent consideration as a liability on the Consolidated Balance Sheets.

Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate and amount paid will be recorded in earnings.

The amount paid that is less than or equal to the liability on the acquisition date is reflected as cash used in financing activities in our Consolidated Statements of Cash Flows.

Any amount paid in excess of the liability on the acquisition date is reflected as cash used in operating activities.

The Company reviews and re-assesses the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could be materially different from the initial estimates or prior amounts.

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These costs and discounts are amortized and included in interest expense over the life of the borrowing using the effective interest method.

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In August 2020, the FASB issued ASU 2020-06.

The provisions of this update simplifies the accounting for convertible instruments by removing certain separation models in ASC 470-20, Debt — Debt with Conversion and Other Options , for convertible instruments.

The convertible debt instruments are be accounted for as a single liability at the amortized cost if separation is no longer required unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging , or (2) a convertible debt instrument was issued at a substantial premium.

Among other potential impacts, this change is expected to reduce reported noncash interest expense, increase reported net income, and result in a reclassification of certain conversion feature balance sheet amounts from stockholders’ equity to liabilities.

The convertible debt instruments are accounted for as a single liability at the amortized cost if separation is no longer required unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, Derivatives and Hedging , or (2) a convertible debt instrument was issued at a substantial premium.

Similarly, the debt discount, which is equal to the carrying value of the embedded conversion feature upon issuance, is no longer amortized into income as interest expense over the life of the instrument.

Additionally, ASU 2020-06 requires the use of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share, which includes the effect of share settlement for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards .

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On January 1, 2022, the Company adopted ASU 2020-06 using the modified retrospective method.

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The expense ultimately recorded is for the awards that vest.

Direct costs represent the Company’s costs of revenue and primarily include costs associated with compensation for personnel directly involved in revenue generation, content fees, production costs, royalty fees, hosting and licensing costs, and processing fees.

Direct costs exclude depreciation and amortization expenses for all periods presented.

For the years ended December 31, 2024, 2023, and 2022, direct costs were $ 200.3 million, $ 185.7 million, and $ 184.5 million, respectively.

Research, Development, and Engineering

Research, development, and engineering costs are expensed as incurred.

Research, development, and engineering costs are costs associated with software design and development and primarily consist of compensation for personnel.

Costs incurred during the preliminary project stage are expensed as incurred.

Costs for software development incurred during the application development stage are capitalized and amortized over their estimated useful lives.

Research, development, and engineering expenditures were $ 68.9 million, $ 74.1 million, and $ 78.9 million for the years ended December 31, 2023, 2022, and 2021, respectively.

We do not capitalize any costs once the software is ready for its intended use.

For the years ended December 31, 2024, 2023, and 2022, research, development, and engineering expenditures were $ 67.4 million, $ 68.9 million, and $ 74.1 million, respectively.

Advertising Costs

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For the years ended December 31, 2024, 2023, and 2022 external advertising costs were $ 114.8 million, $ 120.8 million, and $ 128.8 million, respectively.

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Foreign Currency

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These reserves for tax contingencies are established when the Company believes that certain positions might be challenged despite the Company’s belief that its tax return positions are fully supportable.

The Company adjusts these reserves in light of changing facts and circumstances, such as the outcome of a tax audit or lapse of a statute of

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The Company adjusts these reserves in light of changing facts and circumstances, such as the outcome of a tax audit or lapse of a statute of limitations.

The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate.

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”), which requires that deferred tax assets and liabilities to be recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities.

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”), which requires deferred tax assets and liabilities to be recognized using enacted tax rates for the effect of temporary differences between the book and tax basis of recorded assets and liabilities.

ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the net deferred tax assets will not be realized.

The valuation allowance is reviewed quarterly based upon the facts and circumstances known at the time.

In assessing this valuation allowance, the Company reviews historical and future expected operating results and other factors, including its recent cumulative earnings experience, expectations of future taxable income by taxing jurisdiction and the carryforward periods available for tax reporting purposes, to determine whether it is more likely than not that deferred tax assets are realizable.

Valuation allowances are reviewed quarterly based upon the facts and circumstances known at the time.

In assessing valuation allowances, the Company reviews historical and future expected operating results and other factors, including its recent cumulative earnings experience, expectations of future taxable income by taxing jurisdiction and the carryforward periods available for tax reporting purposes, to determine whether it is more likely than not that deferred tax assets are realizable.

ASC 740 provides guidance on the minimum threshold that an uncertain income tax benefit is required to meet before it can be recognized in the financial statements and applies to all income tax positions taken by a company.

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The Company recognizes accrued interest and penalties related to uncertain income tax positions in income tax expense on its Consolidated Statements of Operations.

On August 16, 2022, the “Inflation Reduction Act” of 2022 (“IRA”) was signed into law.

The IRA included many climate and energy provisions and introduced a 15% corporate alternative minimum tax (“CAMT”) for taxpayers whose average annual adjusted financial statement income exceeds a certain threshold.

The IRA also enacted a one percent excise tax on stock repurchases made by publicly traded U.S.

corporations.

The CAMT and excise tax on stock repurchases are effective for tax years beginning after December 31, 2022.

The Company does not believe that it will be subject to the CAMT as it is expected to be under the threshold of the average annual adjusted financial statement income.

Earnings Per Common Share (“EPS”)

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The Company’s participating securities consist of its unvested share-based payment awards that contain rights to non-forfeitable dividends or dividend equivalents.

On January 1, 2022, the Company adopted ASU 2020-06using the modified retrospective method.

Following this adoption, the Company applies the if-converted method for the diluted net income per share calculation of convertible debt instruments.

Prior to the adoption, the Company used the treasury stock method when calculating the potential dilutive effect of convertible debt instruments.

The Company applies the if-converted method for the diluted net income per share calculation of convertible debt instruments.

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Share Repurchases

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government enacted the Inflation Reduction Act of 2022, which imposed a 1.0% excise tax on share repurchases made after December 31, 2022.

As a result, the Company accrued excise tax in connection with the share repurchases it completed during year ended December 31, 2023.

Segment Reporting

ASC 280 also establishes standards for related disclosures about products and services, geographic areas and major customers.

The Company’s business segments are based on the organization structure used by the chief operating decision maker for making operating and investment decisions and for assessing performance.

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The Company has two reportable segments:

(i) Digital Media and (ii) Cybersecurity and Martech.

Refer to Note 18 — Segment Information for additional detail.

As a result, the Company accrued excise tax in connection with the share repurchases it completed during years ended December 31, 2024 and December 31, 2023.

Recent Accounting Pronouncements

Recently issued applicable accounting pronouncements not yet adopted

Recently issued applicable accounting pronouncements adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

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This update defers the expiration date of ASC Topic 848 from December 31, 2022 to December 31, 2024.

We are currently evaluating the effect the adoption of this update will have on our consolidated financial statements and related disclosures.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.

The amendments in this update modify the disclosure or presentation requirements of a variety of Topics in the Codification.

Certain of the amendments represent clarifications to or technical corrections of the current requirements.

For entities subject to the SEC's existing disclosure requirements and entities required to file/furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for which each amendment will be the date on the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited.

For all other entities, amendments will be effective two years later.

We are currently evaluating the impact the adoption of this update will have on our consolidated financial statements and related disclosures.

We adopted this update during the fourth quarter of 2024.

The adoption of this update did not have a material impact on our consolidated financial statements and related disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

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Early adoption is permitted.

This ASU will likely result in us including the additional required disclosures when adopted.

We are currently evaluating the impact of these provisions and expect to adopt them for the year ended December 31, 2024.

We adopted this update for the annual period ended December 31, 2024 and the amendments have been applied retrospectively to all prior periods presented in the consolidated financial statements by expanding certain disclosures, including the disclosure of significant expenses included in our segment measure of profitability.

Recently issued applicable accounting pronouncements not yet adopted

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.

The amendments in this update modify the disclosure or presentation requirements of a variety of Topics in the Codification.

Certain of the amendments represent clarifications to or technical corrections of the current requirements.

For entities subject to the SEC's existing disclosure requirements and entities required to file/furnish financial statements with or to the SEC in preparation for the sale of or for the purpose of issuing securities that are not subject to contractual restrictions on transfer, the effective date for which each amendment will be the date on the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited.

For all other entities, amendments will be effective two years later.

We do not anticipate that adoption of this update will have a material impact on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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Early adoption is permitted.

This ASU will result in the required additional disclosures being included in our consolidated financial statements, once adopted.

Digital Media

Digital Media revenues are earned primarily from the delivery of advertising services, licensing, and subscriptions to services and information.

This update will result in the required additional disclosures being included in our consolidated financial statements, once adopted.

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Revenue from the delivery of advertising services is earned on websites that are owned and operated by us and on those websites that are part of Digital Media’s advertising network.

Depending on the individual contracts with the customer, revenue for these services is recognized over the contract period when any of the following performance obligations are satisfied:

(i) when an advertisement is placed for viewing, (ii) when a qualified sales lead is delivered, (iii) when a visitor “clicks through” on an advertisement or (iv) when commissions are earned upon the sale of an advertised product.

The Digital Media business also generates revenue from marketing, performance marketing, and production services.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expenses Disaggregation Disclosure (Subtopic 220-40) , which requires disaggregated disclosure of income statement expenses for public business entities.

The amendments in this update do not change the expense captions an entity presents on the face of the income statement;

rather, they require disaggregation of certain expense captions into specified categories, including but not limited to purchases of inventory, employee compensation, depreciation, amortization, and selling expenses.

This update is effective for annual reporting periods beginning after December 15, 2025, and for interim periods within fiscal years beginning after December 15, 2027.

This update will result in the required additional disclosures being included in our consolidated financial statements, once adopted.

The following describes the nature of the Company’s primary types of revenue.

Advertising and Performance Marketing

Advertising and performance marketing revenues are earned primarily from the delivery of advertising services and from marketing, performance marketing, and production services.

Revenues from the delivery of advertising services are earned on websites and applications that are owned and operated by the Company and on those websites and applications that are part of the Company’s advertising network.

Revenues are primarily earned by generating traffic to the Company’s websites, apps, and third-party platforms on which brands of the Company have a presence and monetizing this traffic.

The value provided to the customer is primarily derived from the provision of traffic the Company generates from its specific content within each vertical, as well as data obtained by the website or app traffic.

Such revenues are generally recognized over the period in which the products or services are delivered.

The Company determines whether revenue should be reported on a gross or net basis by assessing whether the Company is acting as the principal or an agent in the transaction, respectively.

The vast majority of the Company’s advertising and performance marketing revenue is recognized on a gross basis as the Company primarily acts as a “principal” as defined under ASC Topic 606, Revenue from Contracts with Customer (“ASC 606”).

Revenues recognized on a gross basis are generated (i) by the Company serving online display and video advertising across its owned and operated web properties, on third-party sites, or on unaffiliated advertising networks;

and (ii) through the Company’s lead-generation business.

The Company records revenue on a net basis with respect to revenue paid to the Company by certain third-party advertising networks who serve online display and video advertising across the Company’s owned-and-operated web properties and certain third-party platforms, primarily related to the transfer of functional intellectual property.

The Company records revenue on a net basis with respect to revenue earned from servicing client gift card programs where we collect the total value of the gift card on our customers’ behalf.

Subscription and Licensing

Revenue from subscriptions is earned through the granting of access to, or delivery of, data products or services to customers.

Revenues from subscriptions are earned through (i) the granting of access to, or delivery of, data products or services to customers;

(ii) usage-based fees, and (iii) reselling various third-party solutions, primarily through the Company’s email security line of business.

Subscriptions cover video games and related content, health information, data, and other copyrighted material.

Revenues are also earned from listing fees, subscriptions to online publications, and from other sources.

Third-party solutions, along with the Company’s proprietary products, allow the Company to offer customers a variety of solutions to better meet the customer’s needs.

Subscription revenues are primarily recognized over the contract term.

Revenues related to the provision of access to historical data for certain services are recorded at the time of delivery.

The Digital Media business also generates revenues through the license of certain assets to clients.

Assets are licensed for clients’ use in their own promotional materials or otherwise and may include logos, editorial reviews, or other copyrighted material that represent symbolic intellectual property, as defined in ASC 606, Revenue from Contracts with Customers .

In instances where usage-based fees are charged, a significant portion of which are paid in advance, the Company defers the portions of monthly, quarterly, semi-annual, and annual fees collected in advance of the satisfaction of performance obligations and recognizes them in the period earned.

Licensing revenues are earned through the license of certain assets to clients.

Revenues under such license agreements are generally recognized over the contract term.

In instances when technology assets in the form of functional intellectual property are licensed to our clients, revenues from the license of these assets are recognized at a point in time.

Digital Media subscription and licensing revenues include revenues from transactions involving the sale of perpetual software licenses, related software support, and maintenance.

Revenue is recognized for software transactions with multiple performance obligations after (i) the contract has been approved and we are committed to perform the respective obligations and (ii) we can identify and quantify each obligation and its respective selling price.

Once the respective performance obligations have been identified and quantified, revenue will be recognized when the obligations are met, either over time or at a point in time, depending on the nature of the obligation.

In instances when technology assets in the form of functional intellectual property are licensed to the Company’s clients, revenues from the license of these assets are recognized at a point in time.

Licensing revenues also include revenues from transactions involving the sale of perpetual software licenses, related software support, and maintenance.

Revenue will be recognized when the obligations are met, either over time or at a point in time, depending on the nature of the obligation.

• Revenues from software license performance obligations are generally recognized upfront at the point in time that the software is made available to the customer for download and use.

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• Revenues from related software support and maintenance are generally recognized ratably over the contractual period, because technical support, unspecified software product upgrades, maintenance releases, and patches are provided to customers on an as needed basis and they are available during the term of the support period.

We are obligated to make the support services available continuously throughout the contract period.

The Company determines whether revenue should be reported on a gross or net basis by assessing whether the Company is acting as the principal or an agent in the transaction, respectively.

The vast majority of the subscription and licensing revenue is recognized on a gross basis as the Company primarily acts as a “principal” as defined under ASC 606.

The Company records revenue on a gross basis with respect to revenue generated from the resale of various third-party solutions, primarily through its email security line of business, because the Company has control of the specified good or service prior to transferring control to the customer.

Other revenues primarily include those from the sale of hardware used in conjunction with software described above, online course revenue, and game publishing revenue.

Hardware product and related software performance obligations, such as an operating system or firmware, are highly interdependent and interrelated and are accounted for as a bundled performance obligation.

Hardware product and related software performance obligations, such as those relating to an operating system or firmware, are highly interdependent and interrelated and are accounted for as a bundled performance obligation.

The revenues for this bundled performance obligation are generally recognized at the point in time that the hardware and software products are delivered and ownership is transferred to the customer.

Cybersecurity and Martech

The Company’s Cybersecurity and Martech revenues substantially consist of subscription revenues which include subscription and usage-based fees, a significant portion of which are paid in advance.

The Company defers the portions of monthly, quarterly, semi-annual, and annual fees collected in advance of the satisfaction of performance obligations and recognizes them in the period earned.

Along with its numerous proprietary Cybersecurity and Martech solutions, the Company also generates subscription revenues by reselling various third-party solutions, primarily through its email security line of business.

These third-party solutions, along with the Company’s proprietary products, allow it to offer customers a variety of solutions to better meet the customer’s needs.

The Company determines whether revenue should be reported on a gross or net basis by assessing whether the Company is acting as the principal or an agent in the transaction, respectively.

The majority of the Company’s other revenue is recognized on a gross basis as the Company primarily acts as a “principal” as defined under ASC 606.

The Company records revenue on a net basis with respect to games sold on third-party platforms.

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Principal vs.

The Company determines whether revenue should be reported on a gross or net basis by assessing whether the Company is acting as the principal or an agent in the transaction, respectively.

The Company records revenue on a gross basis with respect to revenue generated (i) by the Company serving online display and video advertising across its owned and operated web properties, on third-party sites, or on unaffiliated advertising networks;

(ii) through the Company’s lead-generation business;

and (iii) through the Company’s subscriptions, including the resale of various third-party solutions, primarily through its email security line of business.

The Company records revenue on a gross basis with respect to reseller revenue because the Company has control of the specified good or service prior to transferring control to the customer.

Disaggregated Revenues

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Year ended December 31,

Digital Media 2023 2022 2021

$ 747,254 $ 788,135 $ 838,075

Technology & Shopping 2024 (1)

Advertising and performance marketing $ 345,655 $ 310,733 $ 354,545

Subscription and licensing 7,158 8,256 10,052

283,473 244,694 197,354

Other 9,069 11,568 20,332

Total Digital Media revenues $ 1,072,971 $ 1,079,172 $ 1,069,300

Cybersecurity and Martech

Subscription $ 291,209 $ 312,626 $ 348,611

Total Cybersecurity and Martech revenues $ 291,209 $ 312,626 $ 348,611

Total Technology & Shopping revenues $ 361,882 $ 330,557 $ 384,929

Gaming & Entertainment

Advertising and performance marketing $ 120,788 $ 114,074 $ 112,305

Subscription and licensing 59,468 54,747 54,020

Total Gaming & Entertainment revenues $ 180,276 $ 168,821 $ 166,325

Health & Wellness

Advertising and performance marketing $ 299,474 $ 309,182 $ 304,379

Subscription and licensing 49,538 41,185 21,244

Other 13,396 11,556 10,260

Total Health & Wellness revenues $ 362,408 $ 361,923 $ 335,883

Advertising and performance marketing $ 11,926 $ 13,112 $ 16,353

Subscription and licensing 185,994 179,286 159,150

Other 15,700 19,120 15,751

Total Connectivity revenues $ 213,620 $ 211,518 $ 191,254

Cybersecurity & Martech

Subscription and licensing $ 283,502 $ 291,209 $ 312,606

Total Cybersecurity & Martech revenues $ 283,502 $ 291,209 $ 312,606

Corporate $ — $ — $ —

Elimination of inter-segment revenues ( 152 ) ( 801 ) ( 1,189 )

Total Revenues $ 1,401,688 $ 1,364,028 $ 1,390,997

(1) Amounts presented are net of inter-segment revenues.

The Company recorded $ 181.7 million and $ 160.1 million of revenue for the years ended December 31, 2024 and 2023, respectively, which was previously included in the deferred revenue balance as of the beginning of each respective year.

As of December 31, 2023 and 2022, the Company acquired $ 0.7 million and $ 21.5 million, respectively, of deferred revenue in connection with the Company’s business acquisitions, which are subject to purchase accounting adjustments, as appropriate.

Refer to Note 4 — Business Acquisitions for additional details .

Performance Obligations

The Company is a party to multiple concurrent contracts with the same customer, or a party related to that customer.

Some situations may require judgment to determine if those arrangements should be accounted for as a single contract.

Consideration of both the form and the substance of the arrangement is required.

The Company may be a party to multiple concurrent contracts with the same customers, or a party or parties related to those customers.

Some of these situations may require an evaluation to determine if those arrangements should be accounted for as a single contract.

The Company’s contracts with customers may include multiple performance obligations, including contracts when advertising and licensing services are sold together.

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The Company includes any fixed consideration within its contracts as part of the total transaction price.

The Company’s contracts occasionally contain some component of variable consideration, such as commissions that are recognized in the period of the commissionable event.

The Company does not include in the transaction price taxes assessed by a governmental authority that are (i) both imposed on and concurrent with a specific revenue-producing transaction and (ii) collected by us from the customer.

Due to the nature of the services provided, there are no obligations for returns.

The Company satisfies its performance obligations upon delivery of services to its customers.

Within the Digital Media business, the Company provides content to its advertising partners which the Company sells to its partners’ customer base and receives a revenue share based on the terms of the agreement.

The Company’s contracts occasionally contain variable consideration, such as commissions that are

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Payment terms vary by type and location of our customers and the services offered.

The time between invoicing and when payment is due is not significant.

Our Digital Media business consists primarily of performance obligations that are satisfied over time.

This was determined based on a review of the contracts and the nature of the services offered, where the customer simultaneously receives and consumes the benefit of the services provided.

Revenue is recognized based on delivery of services over the contract period for advertising and on a straight-line basis or units of output basis over the contract period for subscriptions.

recognized in the period of the commissionable event.

Payment terms vary by type and location of customers and the services offered.

The time between invoicing and when payment is due is generally not significant.

Due to the nature of the services provided, there are no obligations for returns.

Advertising and performance marketing revenues consist primarily of performance obligations that are satisfied over time, where the customer simultaneously receives and consumes the benefit of the services provided.

In certain instances, the Company provides content to its advertising partners and receives a revenue share based on the terms of the agreement.

Revenue is recognized based on delivery of services over the contract period for advertising.

The Company believes that the methods described are a faithful depiction of the transfer of goods and services.

The Digital Media business also has licensing arrangements that have standalone functionality.

As a result, they are considered to be functional intellectual property where the performance obligations are satisfied at a point in time.

Our Cybersecurity and Martech business consists primarily of performance obligations that are satisfied over time.

This has been determined based on the fact that the nature of services offered are subscription based where the customer simultaneously receives and consumes the benefit of the services provided regardless of whether the customer uses the services.

Depending on the individual contracts with the customer, revenue for these services are recognized over the contract period when any of the following materially distinct performance obligations are satisfied:

Depending on individual contracts with customers, revenues from advertising and performance marketing revenues are recognized over time as distinct performance obligations are satisfied, including when:

• Online display and video advertising in form of impressions, video views and other means is placed for viewing on the Company’s owned-and-operated properties and on third-party sites.

• Commissions are earned upon the sale of an advertised product.

• Qualified sales leads are delivered.

• Visitor “clicks through” an advertisement.

Subscription and licensing revenues are earned from (i) subscription services with performance obligations that are satisfied over time;

and (ii) licensing arrangements that have standalone functionality with performance obligations satisfied at a point in time, where the customer simultaneously receives and consumes the benefit of the services provided regardless of whether the customer uses the services.

The Company believes that the methods described are a faithful depiction of the transfer of goods and services.

Depending on the individual contracts with the customer, revenues for subscription and licensing services are recognized over the contract period as distinct performance obligations are satisfied, including when:

• Voice, email marketing, and search engine optimization as services are delivered.

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• Security solutions, including email and endpoint, are provided.

• Faxing capabilities are provided (included in discontinued operations through October 7, 2021)

The Company has concluded the best measure of progress toward the complete satisfaction of the performance obligation is a time-based measure.

The Company recognizes revenue on a straight-line basis throughout the subscription period, or as usage occurs for services outside of the subscription, and believes that the method used is a faithful depiction of the transfer of goods and services.

• Access is granted to data products and services.

• Continuing access to the content on our websites and apps is provided.

The Company has concluded the best measure of progress toward the complete satisfaction of the performance obligation delivered over the time is a time-based measure.

The Company recognizes revenue on a straight-line basis throughout the subscription period, or as usage occurs, or when functional intellectual property is delivered for services outside of the subscription.

Other revenues consist primarily of performance obligations that are satisfied at a point in time at which control for goods and services is transferred to a customer.

The Company believes that the methods described are a faithful depiction of the transfer of goods and services.

Transaction Price Allocation to Future Performance Obligations

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The amount disclosed does not include revenues related to performance obligations that are part of contracts with original expected durations of twelve months or less or portions of the contracts that remain subject to cancellations.

Further, the disclosure does not include contracts for which the Company recognizes revenue in proportion to the amount it has the right to invoice for services performed.

Further, the disclosure does not include contracts for which the transaction price is a variable consideration that corresponds directly with the Company’s performance.

The Company has made an accounting policy election to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are (i) both imposed on and concurrent with a specific revenue-producing transaction and (ii) collected by the Company from a customer.

ZIFF DAVIS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Costs to Obtain a Contract

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During the years ended December 31, 2024, 2023, and 2022, the Company recognized expense of $ 14.6 million, $ 12.9 million, and $ 15.4 million respectively, related to the amortization of capitalized costs to obtain a contract with a customer.

ZIFF DAVIS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Practical Expedients

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If at contract inception, the Company expects that the period between payment by the customer and the transfer of promised goods or services by the Company to the customer will be one year or less, the Company does not assess whether a contract has a significant financing component.

In addition, the Company has determined that the payment terms that the Company provides to its customers are structured primarily for reasons other than the provision of finance to the Company.

The Company typically charges a single upfront amount for services because other payment terms would affect the nature of the risk assumed by the Company to provide service given the costs of the customer acquisition and the highly competitive and commoditized nature of the business we operate which allows customers to easily move from one provider to another.

In addition, the Company has determined that the payment terms that the Company provides to its customers are structured primarily for reasons other than the provision of finance to the customer.

The Company typically charges a single upfront amount for services because other payment terms would affect the nature of the risk assumed by the Company to provide service given the costs of the customer acquisition and the highly competitive and commoditized nature of the business it operates, which allows customers to easily move from one provider to another.

This additional risk may make it uneconomical to provide the service.

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2024 Acquisitions

The Company completed two immaterial acquisitions during the year ended December 31, 2023, paying the purchase price in cash in each transaction.

The Consolidated Statement of Operations since the date of each acquisition and the balance sheet as of December 31, 2023, reflect the results of operations of all 2023 acquisitions.

Goodwill recognized associated with these acquisitions during the year ended December 31, 2023 was $ 6.5 million, all of which is expected to be deductible for income tax purposes.

Approximately $ 7.2 million of definite-lived intangibles were recorded in connection with the acquisitions during the year ended December 31, 2023.

During the year ended December 31, 2023, the Company recorded adjustments to the initial working capital and to the purchase accounting of certain prior period acquisitions due to the finalization of prior period acquisitions in the Digital Media business which resulted in a net decrease in goodwill of $ 0.1 million.

2022 Acquisitions

The Company completed the following acquisitions during the year ended December 31, 2024, paying the purchase price in cash in each transaction:

(a) a purchase of 100 % of equity interests of Lifecycle Marketing Group Limited, acquired on January 21, 2022, a United Kingdom-based portfolio of pregnancy and parenting brands, including Emma’s Diary and Health Professional Academy, reported within our Digital Media segment;

(b) a purchase of 100 % of equity interests of FitNow, Inc., acquired on June 2, 2022, a Massachusetts-based provider of weight loss products and support, reported within our Digital Media segment;

and (c) four other immaterial Digital Media acquisitions.

The Consolidated Statement of Operations since the date of each acquisition and balance sheet as of December 31, 2022, reflect the results of operations of all 2022 acquisitions.

For the year ended December 31, 2022, these acquisitions contributed $ 33.0 million to the Company’s revenues.

Net income from continuing operations contributed by these acquisitions was not separately identifiable due to the Company’s integration activities and is impracticable to provide.

Total consideration for these transactions was $ 121.7 million, net of cash acquired and assumed liabilities.

(a) a purchase of 100 % of the equity interest in TDS, acquired on February 5, 2024, a digital gifting and branded payments platform, which is reported within our Technology & Shopping segment;

(b) a purchase of 100 % of the equity interest in CNET Media, Inc.

and certain related entities (“CNET”), acquired on September 12, 2024, a digital media publication platform, which is reported within our Technology & Shopping segment;

and (c) two other immaterial acquisitions.

The acquisition of TDS is expected to expand our ability to offer innovative shopping solutions to our merchant partners and broaden our capabilities to help facilitate commerce between consumers and some of the market’s most highly visible brands.

The acquisition of CNET is expected to allow us to reach a wider audience that is attractive to advertisers in the technology space.

Total consideration for all businesses acquired in 2024 was $ 365.0 million, or $ 219.0 million, net of cash acquired.

ZIFF DAVIS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The following table summarizes the allocation of the preliminary purchase consideration for all 2022 acquisitions as of December 31, 2022 (in thousands):

Assets and Liabilities Valuation

Accounts receivable $ 7,433

Prepaid expenses and other current assets 4,915

Property and equipment 369

Operating lease right-of-use assets, noncurrent 545

Trade names 12,839

Customer relationships 20,040

Goodwill 95,737

Other intangibles 18,166

Other long-term assets 11

Accounts payable and accrued expenses ( 6,221 )

Deferred revenue ( 21,474 )

Deferred tax liability ( 10,140 )

Other long-term liabilities ( 516 )

Total $ 121,704

The fair value of the assets acquired includes accounts receivable of $ 7.4 million, all of which was expected to be collectible.

The Company did not acquire any other classes of receivables as a result of its acquisitions.

Goodwill recognized associated with these acquisitions during the year ended December 31, 2022 is $ 95.7 million, of which $ 1.2 million is expected to be deductible for income tax purposes.

During the year ended December 31, 2022, the purchase price accounting was finalized for the following 2021 acquisitions:

DailyOM, SEOmoz, Solutelia, LLC, Arthur L.

Davis Publishing and four other immaterial Digital Media and Cybersecurity and Martech acquired business.

During the year ended December 31, 2022, the Company recorded adjustments to the initial working capital and to the purchase accounting of prior period acquisitions due to the finalization of certain prior period acquisitions in the Digital Media business.

These measurement period adjustments resulted in a net increase in goodwill of $ 4.5 million, which included a $ 3.2 million increase in connection with the unfavorable contract liability for an acquired contract.

The unfavorable contract liability was expected to be accreted over 3 years as of December 31, 2022.

In addition, the Company recorded adjustments to the initial working capital and to the purchase accounting of certain prior period acquisitions in the Cybersecurity and Martech businesses which resulted in a net decrease in goodwill of $ 0.1 million.

Such adjustments had an immaterial impact on the amortization expense within the Consolidated Statements of Operations for the year ended December 31, 2022.

Refer to Note 9 — Goodwill and Intangible Assets for additional information.

The following table summarizes the allocation of the purchase consideration for the acquisition of TDS and CNET as of December 31, 2024 (in thousands):

Assets and Liabilities

$ 142,957 $ —

Accounts receivable and other current assets (1)

171,290 16,351

Intangible assets

108,340 101,000

81,248 36,607

Deferred tax asset, noncurrent (2)

Accounts payable and other current liabilities

( 290,161 ) ( 3,819 )

Deferred tax liability, noncurrent

Deferred revenue, noncurrent

Other noncurrent liabilities

$ 187,588 $ 154,248

(1) The fair value of the assets acquired includes accounts receivable of $ 170.7 million (including Settlement receivables, net of $ 166.8 million) for TDS and $ 15.6 million related to CNET, of which none is expected to be uncollectible.

$ 4.5 million of the goodwill recognized is expected to be deductible for income tax purposes.

(2) Deferred tax asset balance for CNET is presented within ‘Deferred income taxes’ in the ‘Liabilities and Stockholders’ Equity’ section on the Consolidated Balance Sheets.

The amounts assigned to intangible assets by type for all acquisitions during the year ended December 31, 2024 are summarized in the table below (in thousands):

Gross Carrying Value Weighted Average Estimated Life

Customer relationships $ 146,215 10 years

Trade names and trademarks 27,895 9 years

Other purchased intangibles 43,793 5 years

Total gross carrying value $ 217,903

The initial accounting for the 2024 acquisitions, excluding TDS, is incomplete due to the timing of available information and is subject to change.

As of December 31, 2024, the Company has recorded provisional amounts for certain intangible assets (including customer relationships, trade names, and other purchased intangibles), preliminary acquisition date working capital, and related tax items.

The accompanying Consolidated Statements of Operations reflects the results of operations of the 2024 acquisitions since the date of each respective acquisition.

For the year ended December 31, 2024, the Company recorded $ 83.2 million of incremental revenue from the businesses acquired during 2024.

Net income from continuing operations contributed by these acquisitions was not separately identifiable due to the Company’s integration activities and is impracticable to provide.

Unaudited Pro Forma Financial Information for the 2024 Acquisitions

The following unaudited pro forma information reflects the combined results from these acquisitions had they occurred on January 1, 2023.

This information is not necessarily indicative of the Company’s consolidated results of operations in future periods or the results that actually would have been realized had the Company and the acquired businesses been combined companies during the periods presented.

These pro forma results are estimates and exclude any savings or synergies that would have resulted from these business acquisitions had they occurred on January 1, 2023.

This unaudited pro forma supplemental information includes incremental intangible asset amortization and other charges as a result of the acquisitions, net of the related tax effects.

ZIFF DAVIS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Unaudited Pro Forma Financial Information for All 2022 Acquisitions

The following unaudited pro forma information is not necessarily indicative of the Company’s consolidated results of operations in future periods or the results that actually would have been realized had the Company and the acquired businesses been combined companies during the periods presented.

These pro forma results are estimates and exclude any savings or synergies that would have resulted from these business acquisitions had they occurred on January 1, 2021.

This unaudited pro forma supplemental information includes incremental intangible asset amortization and other charges as a result of the acquisitions, net of the related tax effects.

The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and its 2022 acquisitions as if each acquisition had occurred on January 1, 2021 (in thousands, except per share amounts):

Year ended December 31,

Years ended December 31,

(in thousands, except per share data)

Revenues $ 1,470,182 $ 1,521,064

Net income from continuing operations $ 64,877 $ 398,201

Net income $ 49,433 $ 22,206

Income per common share from continuing operations - Basic

$ 1.11 $ 0.48

Income per common share from continuing operations - Diluted

$ 1.11 $ 0.48

2023 Acquisitions

The Company completed two immaterial acquisitions during the year ended December 31, 2023, paying the purchase price in cash in each transaction.

The accompanying Consolidated Statements of Operations reflect the results of operations of the 2023 acquisitions since the date of each respective acquisition.

Goodwill recognized associated with these acquisitions during the year ended December 31, 2023 was $ 6.5 million, all of which is expected to be deductible for income tax purposes.

Approximately $ 7.2 million of definite-lived intangibles were recorded in connection with the acquisitions during the year ended December 31, 2023.

During the year ended December 31, 2023, the Company recorded adjustments to the initial working capital and to the purchase accounting of certain prior period acquisitions due to the finalization of prior period acquisitions in the Health business which resulted in a net decrease in goodwill of $ 0.1 million.

2022 Acquisitions

The Company completed the following acquisitions during the year ended December 31, 2022, paying the purchase price in cash in each transaction:

(a) an asset purchase of DailyOM, acquired on April 30, 2021, a California-based provider of health and wellness digital media, content, and learning business;

(b) a share purchase of SEOmoz, acquired on June 4, 2021, a Seattle-based provider of search engine optimization (“SEO”) solutions;

(c) an asset purchase of Solutelia, LLC, acquired on July 15, 2021, a Colorado-based on-demand wireless telecommunications network monitoring and analysis, testing and optimization software business and related wireless telecommunications engineering services business;

(d) a stock purchase of Arthur L.

Davis Publishing, acquired on September 23, 2021, an Iowa-based digital nursing publication;

(e) a stock purchase of Root Wireless, Inc.

acquired on December 13, 2021, a Washington-based mobile analytics firm;

and (f) four other immaterial Digital Media acquisitions.

The Consolidated Statement of Operations since the date of each acquisition and balance sheet as of December 31, 2021, reflect the results of operations of all 2021 acquisitions.

(a) a purchase of 100 % of equity interests of Lifecycle Marketing Group Limited, acquired on January 21, 2022, a portfolio of pregnancy and parenting brands, including Emma’s Diary and Health Professional Academy, reported within the Health & Wellness segment;

(b) a purchase of 100 % of equity interests of FitNow, Inc., acquired on June 2, 2022, a provider of weight loss products and support, reported within the Health & Wellness segment;

and (c) four other immaterial acquisitions.

The accompanying Consolidated Statements of Operations reflect the results of operations of the 2022 acquisitions since the date of each respective acquisition.

For the year ended December 31, 2022, these acquisitions contributed $ 33.0 million to the Company’s revenues.

Net income from continuing operations contributed by these acquisitions was not separately identifiable due to the Company’s integration activities and is impracticable to provide.

Total consideration for these transactions was $ 160.4 million, net of cash acquired and assumed liabilities and is subject to certain post-closing adjustments which may increase or decrease the final consideration paid.

Total consideration for all businesses acquired in 2022 was $ 151.4 million, or $ 121.7 million, net of cash acquired.

ZIFF DAVIS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The following table summarizes the allocation of the purchase consideration for all 2021 acquisitions as of December 31, 2021, including individually material acquisitions noted separately (in thousands):

The following table summarizes the allocation of the purchase consideration for all 2022 acquisitions as of December 31, 2022 (in thousands):

Assets and Liabilities Valuation

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Customer relationships 20,040

Goodwill 97,032

Other intangibles 18,166

Other long-term assets 62

Deferred tax asset 230

Other noncurrent assets 11

Accounts payable and accrued expenses ( 6,221 )

Deferred revenue ( 21,474 )

Operating lease liabilities, current ( 7,191 )

Other current liabilities ( 14 )

Deferred tax liability ( 10,140 )

Other long-term liabilities ( 1,511 )

Other noncurrent liabilities ( 516 )

Total $ 121,704

The fair value of the assets acquired includes accounts receivable of $ 9.5 million.

The gross amount due under contracts is $ 9.9 million, of which $ 0.4 million was expected to be uncollectible.

The Company did not acquire any other classes of receivables as a result of its acquisitions.

(1) Goodwill recognized associated with these acquisitions during the year ended December 31, 2022 is $ 95.7 million, of which $ 1.2 million is expected to be deductible for income tax purposes.

The fair value of the assets acquired includes accounts receivable of $ 7.4 million, all of which was expected to be collectible.

The Company did not acquire any other classes of receivables as a result of its acquisitions.

Unaudited Pro Forma Financial Information for All 2022 Acquisitions

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Income per common share from continuing operations - Diluted $ 1.38

ZIFF DAVIS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

SEOmoz Acquisition

On June 4, 2021, the Company acquired all the outstanding issued capital of SEOmoz at a purchase consideration of $ 67.0 million, net of cash acquired and assumed liabilities.

SEOmoz is a provider of search engine optimization (“SEO”) solutions.

The Consolidated Statement of Operations since the date of acquisition and balance sheet as of December 31, 2021, reflect the results of operations of SEOmoz.

For the year ended December 31, 2021, SEOmoz contributed $ 25.6 million to the Company’s revenues.

Net income from continuing operations contributed by SEOmoz since the acquisition date was not separately identifiable due to the Company’s integration activities and is impracticable to provide.

The following table summarizes the allocation of the purchase consideration for the SEOmoz acquisition (in thousands):

Assets and Liabilities Valuation

Accounts receivable $ 3,278

Prepaid expenses and other current assets 1,547

Property and equipment 1,845

Operating lease right of use asset 5,888

Trade names 7,406

Customer relationships 5,000

Goodwill 41,329

Other intangibles 22,777

Other long-term assets 62

Accounts payables and accrued expenses ( 2,655 )

Other current liabilities ( 14 )

Deferred revenue ( 6,398 )

Operating lease liabilities, current ( 7,191 )

Deferred tax liability ( 5,327 )

Other long-term liabilities ( 550 )

Total $ 66,997

The fair value of the assets acquired includes accounts receivable of $ 3.3 million.

The gross amount due under contracts is $ 3.6 million, of which $ 0.3 million was expected to be uncollectible.

The Company did not acquire any other classes of receivables as a result of its acquisitions.

Goodwill recognized in connection with this acquisition during the year ended December 31, 2021 is $ 41.3 million of which zero is expected to be deductible for income tax purposes.

Unaudited Pro Forma Financial Information for SEOmoz Acquisition

The following unaudited pro forma information is not necessarily indicative of the Company’s consolidated results of operations in future periods or the results that actually would have been realized had the Company and the acquired business been combined companies during the periods presented.

These pro forma results are estimates and exclude any savings or synergies that would have resulted from this business acquisition had it occurred on January 1, 2021.

This unaudited pro forma supplemental information includes incremental intangible asset amortization and other charges as a result of the SEOmoz acquisition, net of the related tax effects.

The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and SEOmoz as if the acquisition had occurred on January 1, 2021 (in thousands, except per share amounts):

December 31, 2021

Revenues $ 1,438,099

Net income from continuing operations

Income per common share from continuing operations - Basic $ 8.84

Income per common share from continuing operations - Diluted $ 8.48

Deferred Acquisition Payments

As of December 31, 2024, future payments associated with contractual obligations for holdback payments in connection with all business acquisitions are as follows (in thousands):

ZIFF DAVIS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Deferred Acquisition Payments

As of December 31, 2023, future payments associated with contractual obligations for holdback payments in connection with all business acquisitions are as follows (in thousands):

2024 $ 12,483

Investments consist of equity and debt securities.

Investment in equity securities

Following the Separation, the Company retained shares of publicly traded common stock of Consensus.

As of December 31, 2023 and December 31, 2022, the Company held approximately 1.0 million and 1.1 million shares, respectively, of the common stock of Consensus.

As of December 31, 2023 and December 31, 2022, the carrying value of the investment in Consensus was $ 27.1 million and $ 58.4 million, respectively, and is included in ‘Short-term investments’ on the Consolidated Balance Sheets.

The Company accounts for its investment in Consensus at fair value under the fair value option, and the related fair value gains and losses are recognized in earnings.

Following the Separation, the Company retained an interest in Consensus common stock.

As of December 31, 2024 and December 31, 2023, the Company held approximately zero and 1.0 million shares, respectively, of the common stock of Consensus.

During the year ended December 31, 2022, the Company completed the non-cash tax-free debt-for-equity exchanges of 2,800,000 shares of its common stock of Consensus for the extinguishment of $ 112.3 million of principal of the Company’s Term Loan Facilities (as defined in Note 9 — Debt ), and related interest.

During the years ended December 31, 2023 and December 31, 2022, the Company sold 52,393 shares and 73,919 shares, respectively, of common stock of Consensus in the open market.

Losses on equity securities recorded in ‘Unrealized (loss) gain on short-term investments held at the reporting date, net’ in the Consolidated Statements of Operations consisted of the following (in thousands):

Year ended December 31,

Net losses during the period

$ ( 28,138 ) $ ( 53,888 )

gain (loss) on securities sold during the period

357 ( 46,743 )

Unrealized loss recognized during the period on short-term investments held at the reporting date

$ ( 28,495 ) $ ( 7,145 )

During the year ended December 31, 2023, the Company sold 52,393 shares of common stock of Consensus in the open market.

As of December 31, 2023, the carrying value of the investment in Consensus was $ 27.1 million, which was included in ‘Short-term investments’ on the Consolidated Balance Sheets.

The Company accounted for its investment in Consensus at fair value under the fair value option, and the related fair value gains and losses are recognized in earnings.

During the second quarter of 2024, the Company sold its remaining 1,034,295 shares of Consensus in the open market.

For the years ended December 31, 2024, 2023, and 2022, losses of $ 7.7 million, $ 28.1 million, and $ 53.9 million, respectively, were recorded in the Consolidated Statements of Operations.

On July 31, 2023, the Company entered into an agreement to purchase $ 25.0 million of equity in Xyla, Inc.

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As of December 31, 2024, the investment in Xyla has a carrying value of $ 25.3 million, including transaction costs, and is included in ‘Long-term investments’ in the Consolidated Balance Sheets.

Prior to December 31, 2021, the Company owned certain equity securities without a readily determinable fair value, which it received as part of the consideration for the sale of a subsidiary in 2017.

These securities were privately held, not traded on any public exchanges and not an investment in a mutual fund or similar investment.

The Company elected to measure this investment at cost, less impairment, adjusted for subsequent observable price changes to estimate fair value.

The Company made a “reasonable effort” to identify any observable price changes for identical or similar investments with the issuer that were known and could be reasonably known.

Any changes in the carrying value of the equity securities were reported in current earnings as Loss on investment, net.

During the year ended December 31, 2021, the Company recorded a $ 16.7 million impairment loss on investments related to a decline in value due to a sales transaction of an investee.

The Company subsequently sold its remaining investments in these securities with proceeds of $ 14.3 million and a realized loss of approximately $ 0.3 million.

As of December 31, 2021 cumulative impairment losses on these securities were $ 40.5 million.

ZIFF DAVIS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Investment in corporate debt security

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If the Company becomes aware of a significant decline in value that is other-than-temporary, the loss will be recorded in the period in which the Company identifies the decline.

During the years ended December 31, 2023, 2022, and 2021, the Company recognized (loss) income from equity method investment, net of $( 9.3 ) million, $( 7.7 ) million, and $ 35.8 million, net of tax expense (benefit), respectively.

During the years ended December 31, 2024, 2023, and 2022, the Company recognized income (loss) from equity method investment, net of $ 11.2 million, $( 9.3 ) million, and $( 7.7 ) million, net of tax expense (benefit), respectively.

The gains and losses in the years presented were primarily the result of gains and losses in the underlying investments.

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These equity securities are included within ‘Long-term investments’ in the Consolidated Balance Sheets.

As a limited partner, the Company’s maximum exposure to loss is limited to its proportional ownership in the partnership.

In addition, the Company is not required to contribute any further capital.

Finally, there are no call or put options, or other types of arrangements, which limit the Company’s ability to participate in losses and returns of the OCV Fund.

Discontinued Operations and Dispositions

Consensus Spin-Off

As further described in Note 2 — Basis of Presentation and Summary of Significant Accounting Policies , on October 7, 2021, the Separation of the cloud fax business was completed.

No gain or loss was recorded on the Separation in the Consolidated Statements of Operations.

On October 7, 2021, Consensus paid Ziff Davis approximately $ 259.1 million of cash in a distribution that is anticipated to be tax-free provided certain requirements are met, and issued $ 500.0 million of senior notes due 2028 to Ziff Davis, which Ziff Davis then exchanged such notes with the lenders under the Credit Agreement and Credit Agreement Amendments by and among the subsidiaries of Ziff Davis party thereto as guarantors, Citicorp North America Inc.

and MUFG Union Bank, N.A.

and MUFG Union Bank, N.A., as administrative agent for the lenders, in exchange for extinguishment of indebtedness outstanding under the Bridge Loan Facility.

Refer to Note 10 — Debt for additional details.

Such lenders or their affiliates agreed to resell the 2028 notes to qualified institutional buyers in the United States pursuant to Rule 144A.

The Company incurred a net loss on extinguishment of debt principal outstanding on the Bridge Loan Facility of approximately $ 8.8 million, which is recorded within ‘Gain (loss) on debt extinguishment, net’ component of ‘(Loss) income from discontinued operations, net of income taxes’ within the Consolidated Statements of Operations for the year ended December 31, 2021 (see note 10 — Debt ).

The divestiture of the cloud fax business was determined to qualify for US Federal tax-free treatment under certain sections of the Internal Revenue Code based on various facts and assumptions, as well as certain representations, statements and undertakings of Ziff Davis and Consensus being accurate and/or complete .

ZIFF DAVIS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The accounting requirements for reporting the Company’s cloud fax business as a discontinued operation were met when the Separation was completed as the Separation constituted a strategic shift that would have a major effect on the Company’s operations and financial results.

Accordingly, the consolidated financial statements reflect the results of the cloud fax business as a discontinued operation for the years ended December 31, 2022 and 2021.

The Consolidated Balance Sheets and Consolidated Statements of Operations report discontinued operations separate from continuing operations.

The Consolidated Statements of Comprehensive Income, Consolidated Statements of Cash Flows, including Note 19 — Supplemental Cash Flow Information, and Consolidated Statements of Stockholders’ Equity combine continuing and discontinued operations.

The key components of cash flows from discontinued operations were as follows (in thousands):

December 31, 2021

Capital expenditures $ 15,252

Depreciation and amortization $ 9,010

Loss on debt extinguishment $ 8,750

Deferred taxes $ 8,015

In preparation for and executing the Separation, the Company incurred $ 11.6 million, net of reimbursement from Consensus, in transaction-related costs including legal and accounting fees during the year ended December 31, 2021, which were recorded in ‘General, administrative, and other related costs’ component of ‘(Loss) income from discontinued operations, net of income taxes’ within the Consolidated Statement of Operations.

These transaction costs primarily related to professional fees associated with preparation of regulatory filings and transaction execution and separation activities within finance, tax, and legal functions.

In connection with the Separation, Ziff Davis and Consensus entered into several agreements that govern the relationship of the parties following the Separation, which are further discussed in Note 21 — Related Party Transactions .

Further, certain of the Company’s management and members of its board of directors resigned from the Company as of the Distribution Date and joined Consensus.

The Company made an accounting policy election not to allocate interest to discontinued operations.

Interest expense included in discontinued operations relates to the 6.0 % Senior Notes (as defined in Note 10 — Debt ) issued by J2 Cloud Services, LLC and the Bridge Loan Facility (as defined in Note 10 — Debt ), which was required to be repaid as part of the Separation.

The key components of income from discontinued operations were as follows (in thousands):

Year ended December 31,

Revenues $ — $ 270,248

Sales and marketing — ( 40,980 )

Research, development and engineering — ( 5,814 )

General, administrative, and other related costs

Interest expense and other — ( 13,856 )

Income before income taxes — 126,013

Income tax expense ( 1,709 ) ( 30,694 )

(Loss) income from discontinued operations, net of income taxes $ ( 1,709 ) $ 95,319

B2B Back-up and Voice Asset Sales

The Company completed the following dispositions that did not meet the criteria for discontinued operations.

ZIFF DAVIS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

During the year ended December 31, 2021, the Company committed to a plan to sell certain Voice assets in the United Kingdom as they were determined to be non-core assets.

Such assets were recorded within the Cybersecurity and Martech reportable segment.

On February 9, 2021, in a cash transaction, the Company sold the Voice assets.

The total gain recognized on the sale of these Voice assets was $ 2.8 million, which is presented in ‘Loss on sale of businesses’ on the Consolidated Statement of Operations in the year ended December 31, 2021.

During the year ended December 31, 2021, the Company committed to a plan to sell its B2B Backup business as it was determined to be a non-core business.

The B2B Backup business met the held for sale criteria, and accordingly, the assets and liabilities were presented as held for sale on the Consolidated Statement Balance Sheets at March 31, 2021 and June 30, 2021.

The business was recorded within the Cybersecurity and Martech reportable segment.

During the second quarter of 2021, the Company received an offer to purchase the B2B Backup business and management determined that the fair value of the business less cost to sell was lower than its carrying amount.

As a result, the Company recorded an impairment to goodwill of $ 32.6 million during the year ended December 31, 2021, which is presented in ‘Goodwill impairment on business’ on the Consolidated Statement of Operations.

Refer to Note 9 — Goodwill and Intangible Assets .

On September 17, 2021, in a cash transaction, the Company sold the B2B Backup business.

The total loss recognized on the sale of the B2B Backup business was $ 24.6 million, which is presented in ‘Loss on sale of businesses’ on the Consolidated Statement of Operations in the year ended December 31, 2021.

As a limited partner, the Company’s maximum exposure to loss is limited to its proportional ownership in the partnership.

In addition, the Company is not required to contribute any further capital.

Finally, there are no call or put options, or other types of arrangements, which limit the Company’s ability to participate in losses and returns of the OCV Fund.

Fair Value Measurements

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The Company values these Level 1 investments using quoted market prices.

The Investment in Consensus is an investment in equity securities for which the Company elected the fair value option, and the fair value of the Investment in Consensus and subsequent fair value changes are included in our assets of and results from continuing operations, respectively.

At December 31, 2023 and 2022, our investment in Consensus common stock was remeasured at fair value based on Consensus’ closing stock price, with unrealized (losses) gains of $( 28.5 ) million and $( 7.1 ) million, respectively, recorded in the Consolidated Statement of Operations and a balance of $ 27.1 million and $ 58.4 million, respectively, in the Consolidated Balance Sheet.

The fair value of the investment in Consensus is determined using the quoted market prices, which is a Level 1 input.

The fair value of the Company’s investment in Consensus common stock was determined using quoted market prices, which a Level 1 input.

On May 22, 2024, the Company sold its remaining investments in Consensus common stock (see Note 5 — Investments ).

The Company has investment in a corporate debt security that does not have a readily determinable fair value because the acquired securities are privately held, not traded on any public exchanges, and not an investment in a mutual fund or similar investment.

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As of December 31, 2024 and 2023, the fair value was determined based upon various probability-weighted scenarios which included discount rate assumptions between 9 % and 10 %, depending on the probability scenario.

In addition, the determination of fair value included a conversion timeframe of approximately one to three years, depending on the probability scenario, as of December 31, 2023 and approximately one-year as of December 31, 2022.

The Company classifies its contingent consideration liability in connection with acquisitions within Level 3 because factors used to develop the estimated fair value are unobservable inputs, such as volatility and market risks, and are not

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supported by market activity.

In addition, the determination of fair value included a conversion timeframe of approximately six months to two years , depending on the probability scenario, as of December 31, 2024, and approximately one to three years, depending on the probability scenario, as of December 31, 2023.

The valuation approaches used to value Level 3 investments considers unobservable inputs in the market such as time to liquidity, volatility, dividend yield, and breakpoints.

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As of December 31, 2024 and 2023, the contingent consideration was determined using a 100% probability of payout at the maximum amount, without any other estimates applied.

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The following tables present the fair values of the Company’s financial assets or liabilities that are measured at fair value on a recurring basis (in thousands):

2 unchanged sentences

Money market and other funds $ 85,833 $ — $ — $ 85,833 $ 85,833

Short-term investments:

Consensus common stock 27,109 — — $ 27,109 27,109

Long-term investments:

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The following table presents a reconciliation of the Company’s Level 3 financial assets related to our contingent consideration arrangements and investment in corporate debt securities that are measured at fair value on a recurring basis (in thousands):

Year ended December 31,

Years ended December 31,

Contingent Consideration Arrangements Corporate Debt Securities Contingent Consideration Arrangements Corporate Debt Securities

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$ 2,834 $ 17,788 $ 2,834 $ 15,699

(1) The fair value adjustments to the contingent consideration arrangements in the table above were recorded within ‘General, administrative, and other related costs’ on the Consolidated Statements of Operations during the year ended December 31, 2023 and 2022.

The fair value adjustments to the corporate debt securities in the table above were recorded within ‘Change in fair value on available-for-sale investments, net’ on the Consolidated Statements of Comprehensive Income during the year ended December 31, 2023 and 2022.

Nonrecurring Fair Value Measurements

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Such fair value measurements are based predominately on Level 3 inputs.

See Note 2 — Basis of Presentation for further information on intangible assets and right-of-use assets impairment charges recorded in the years ended December 31, 2023, 2022, and 2021.

See Note 8 — Goodwill and Intangible Assets for further information on a goodwill impairment charges recorded in the years ended December 31, 2024, 2023, and 2022.

Other Fair Value Disclosures

The fair value of the Company’s 4.625 % Senior Notes and 1.75 % Convertible Notes (as defined in Note 10 — Debt ) was determined using quoted market prices or dealer quotes for instruments with similar maturities and other terms and credit ratings, which are Level 1 inputs.

If such information is not available for the 1.75 % Convertible Notes, the fair value is determined using cash-flow models of the scheduled payments discounted at market interest rates for comparable debt without the conversion feature.

The fair value of the Company’s 4.625 % Senior Notes, 3.625 % Convertible Notes, and 1.75 % Convertible Notes (as defined in Note 9 — Debt ) was determined using quoted market prices or dealer quotes for instruments with similar maturities and other terms and credit ratings, which are Level 1 inputs.

If such information is not available for the 1.75 % Convertible Notes and 3.625 % Convertible Notes, the fair value is determined using cash-flow models of the scheduled payments discounted at market interest rates for comparable debt without the conversion feature.

The following table presents the carrying value and the fair value of financial instruments measured at fair value only for disclosure purposes:

Year ended December 31,

Carrying Value Fair Value Carrying Value Fair Value

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$ 148,186 $ 139,976 $ 544,516 $ 519,492

3.625 % Convertible Notes (1)

$ 258,885 $ 259,200 $ — $ —

(1) On July 16, 2024, the Company exchanged approximately $ 400.9 million in aggregate principal amount of the Company’s 1.75 % Convertible Notes as part of the Exchange Transaction.

The Company issued $ 263.1 million in aggregate principal amount of new 3.625 % Convertible Notes, as defined in Note 9 — Debt, and paid an aggregate of approximately $ 135.0 million in cash.

Refer to Note 9 — Debt for additional information.

ZIFF DAVIS, INC.

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Computer hardware, software, and related equipment

$ 546,777 $ 502,564

Furniture and equipment 4,820 2,836

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Total property and equipment, net $ 197,216 $ 188,169

Depreciation expense was $ 92.1 million, $ 76.7 million, and $ 63.6 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Total disposals of property and equipment, net was $ 0.0 million , $ 0.2 million, and $ 11.0 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Depreciation expense included in ‘Depreciation and amortization’ on our Consolidated Statements of Operations was $ 94.4 million, $ 92.1 million, and $ 76.7 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Goodwill and Intangible Assets

The changes in carrying amounts of goodwill for the years ended December 31, 2024 and 2023 are as follows (in thousands):

Digital Media Cybersecurity and Martech Consolidated

Technology & Shopping Gaming & Entertainment Health & Wellness Connectivity Cybersecurity & Martech Consolidated

Balance as of January 1, 2023

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Goodwill acquired (Note 4 )

3,849 — 2,602 — — 6,451

Goodwill impairment ( 56,850 ) — — — — ( 56,850 )

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Goodwill acquired (Note 4 )

Goodwill impairment ( 56,850 ) — ( 56,850 )

Purchase accounting adjustments (1)

117,855 6,811 — — 4,532 129,190

Goodwill removed due to sale of business (2)

( 3,983 ) — — — — ( 3,983 )

Goodwill impairment ( 85,273 ) — — — — ( 85,273 )

Foreign exchange translation ( 194 ) 5 ( 201 ) ( 1,544 ) ( 3,815 ) ( 5,741 )

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(1) Purchase accounting adjustments relate to measurement period adjustments to goodwill in connection with prior business acquisitions (see Note 4 — Business Acquisitions ).

During the years ended December 31, 2023 and 2022, the Company reassessed the fair value of certain reporting units within the Digital Media reportable segment as a result of a forecasted reduction in revenue and profitability in those reporting units, as well as an increase in interest rates and market volatility that would affect the Company’s assumptions on its discount rate.

Based on the quantitative fair value test in each period, the carrying value of the reporting unit that was tested exceeded its fair value, and the Company recorded an impairment of approximately $ 56.9 million during the year ended December 31, 2023, and approximately $ 27.4 million during the year ended December 31, 2022.

Following the impairment during the year ended December 31, 2023, there was no excess of fair value over the carrying value at the reporting unit, so any further decrease in estimated fair value that exceeds the carrying value, would result in an additional impairment charge to goodwill.

As of December 31, 2023, this reporting unit had goodwill of approximately $ 79.2 million.

Changes in market conditions, and key assumptions made in future quantitative assessments, including expected cash flows, competitive factors, and discount rates, could negatively impact the results of future impairment testing and could result in the recognition of an impairment charge.

(2) During the year ended December 31, 2024, in a cash transaction, the Company sold an international business at Technology & Shopping, which resulted in $ 4.0 million of goodwill being removed in connection with this sale.

During the year ended December 31, 2024, the Company reassessed the fair value of certain reporting units within the Technology & Shopping, Health & Wellness, and Cybersecurity & Martech reportable segments as a result of a sustained decline in the Company’s stock price, and forecasted reduction in revenue and earnings before interest, taxes, depreciation, and amortization (“EBITDA”) in certain of its reporting units.

Based on the quantitative fair value test of two reporting units within the Technology & Shopping reportable segment, the carrying value of the reporting units exceeded their fair value, and the Company recorded an impairment of approximately $ 85.3 million during the year ended December 31, 2024.

ZIFF DAVIS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

In each period, the fair value of the reporting unit was determined using an equal weighting of an income approach that was based on the discounted estimated future cash flows of the reporting unit and a market approach that uses the guideline public company approach.

We believe the combination of these approaches provides an appropriate valuation because it incorporates the expected cash generation of the reporting unit in addition to how a third-party market participant would value the reporting unit.

As the business is assumed to continue in perpetuity, the discounted future cash flows include a terminal value.

During the year ended December 31, 2023, the Company reassessed the fair value of certain reporting units within the Technology & Shopping reportable segment as a result of forecasted reduction in revenue and EBITDA in the reporting unit, as well as an increase in interest rates and market volatility that could affect the Company’s assumptions on its discount rates.

Based on the quantitative fair value test, the carrying value of the reporting unit exceeded its fair value, and the Company recorded an impairment of approximately $ 56.9 million during the year ended December 31, 2023.

During each period, the fair value of the relevant reporting unit was determined using an equal weighting of an income approach that was based on the discounted estimated future cash flows of the reporting unit and a market approach that uses the guideline public company approach.

As each business is assumed to continue in perpetuity, the discounted future cash flows include a terminal value.

Determining fair value using a discounted estimated future cash flow analysis requires the exercise of significant judgment with respect to several items, including the amount and timing of expected future cash flows and appropriate discount rates.

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From the comparable companies, a representative market multiple is determined, which is applied to financial metrics to estimate the fair value of the reporting unit.

During the year ended December 31, 2022, the Company realigned two reporting units within the Digital Media reportable segment.

The Company re-allocated goodwill between the two identified reporting units based upon the relative fair value of the respective reporting units.

Immediately before and immediately following this change in reporting units, the Company performed a quantitative fair value assessment using the income approach and market approach noted above, and each of these reporting units exceeded their respective carrying values and, therefore, there was no impairment to goodwill.

During the year ended December 31, 2021, the Company recorded an impairment of approximately $ 32.6 million related to the Company’s B2B Backup business (included in the Cybersecurity and Martech reportable segment).

In 2021, the Company received an offer to purchase the B2B Backup business and management determined that the fair value of that business less cost to sell was lower than its carrying amount.

The fair value of the business was determined based upon the offer price.

The fair value of the remaining reporting unit was determined using an equal weighting of an income approach and a market approach, and was in excess of the remaining carrying value of the reporting unit.

Goodwill as of December 31, 2023 and 2022 reflects accumulated impairment losses of $ 84.2 million and $ 27.4 million, respectively, in the Digital Media reportable segment.

Goodwill as of December 31, 2024 and 2023 reflects accumulated impairment losses of $ 169.5 million and $ 84.2 million, respectively, in the Technology & Shopping reportable segment.

Intangible Assets Subject to Amortization

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Total $ 1,420,232 $ 1,094,826 $ 325,406

(1) The Company reclassified its trademarks as of December 31, 2022 from ‘other purchased intangibles’ to ‘trade names and trademarks’ to conform to current period presentation.

The trademarks totaled $ 54.8 million of carrying value as of December 31, 2022 ($ 98.5 million of historical cost and $ 43.7 million of accumulated amortization).

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Expected amortization expenses for intangible assets subject to amortization at December 31, 2024 are as follows (in thousands):

2025 $ 114,658

Thereafter 41,956

Total expected amortization expense $ 425,749

Amortization expense, included in ‘General, administrative, and other related costs’ on our Consolidated Statements of Operations was approximately $ 144.9 million, $ 156.7 million, and $ 185.7 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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Amortization expense included in ‘Depreciation and amortization’ on our Consolidated Statements of Operations was approximately $ 117.5 million, $ 144.9 million, and $ 156.7 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Long-term debt consists of the following (in thousands):

3 unchanged sentences

149,109 550,000

3.625 % Convertible Notes

Total Notes 872,294 1,010,038

2 unchanged sentences

Deferred issuance costs (1)

( 2,336 ) ( 6,263 )

Total long-term debt $ 864,282 $ 1,001,312

(1) Includes $ 0.7 million and $ 0.8 million of carrying amount of deferred issuance costs on the 4.625 % Senior Notes as of December 31, 2024 and December 31, 2023, respectively, $ 0.9 million and $ 5.5 million of carrying amount of deferred issuance costs on the 1.75 % Convertible Notes as of December 31, 2024 and December 31, 2023, respectively, and $ 0.7 million of carrying amount of deferred issuance costs on the 3.625 % Convertible Notes as of December 31, 2024.

At December 31, 2024, future principal and interest payments for debt are as follows (in thousands):

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These senior notes bear interest at a rate of 4.625 % per annum, payable semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2021.

The 4.625 % Senior Notes mature on October 15, 2030, and are senior unsecured obligations of the Company which are guaranteed, jointly and severally, on an unsecured basis by certain of the

The 4.625 % Senior Notes mature on October 15, 2030, and are senior unsecured obligations of the Company which are guaranteed, jointly and severally, on an unsecured basis by certain of the Company’s existing and future domestic direct and indirect wholly-owned subsidiaries (collectively, the “Guarantors”).

If the Company or any of its restricted subsidiaries acquires or creates a domestic restricted subsidiary, other than an Insignificant Subsidiary (as defined in the indenture pursuant to which the 4.625 % Senior Notes were issued (the “Indenture”)), after the issue date, or any Insignificant Subsidiary ceases to fit within the definition of Insignificant Subsidiary, such restricted subsidiary is required to unconditionally guarantee, jointly and severally, on an unsecured basis, the Company’s obligations under the 4.625 % Senior Notes.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Company’s existing and future domestic direct and indirect wholly-owned subsidiaries (collectively, the “Guarantors”).

The Company may redeem some or all of the 4.625 % Senior Notes at any time on or after October 15, 2025 at specified redemption prices plus accrued and unpaid interest, if any, up to, but excluding the redemption date.

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The Company is in compliance with its debt covenants for the 4.625 % Senior Notes as of December 31, 2024.

On October 8, 2021, Ziff Davis announced that it had accepted tender offers to purchase $ 83.3 million in aggregate principal of its 4.625 % Senior Notes for an aggregate purchase price of $ 90.0 million.

The tender offer expired on October 22, 2021.

As such, the Company recognized a loss of approximately $ 7.4 million associated with the tender of the 4.625 % Senior Notes during the year ended December 31, 2021, which is presented in ‘Gain (loss) on debt extinguishment, net’ on the Consolidated Statements of Operations.

Repurchases of 4.625 % Senior Notes on the open market (excluding those from a tender offer) were as follows (in thousands):

Year ended December 31,

Prior to 2022, the Company repurchased $ 83.3 million in aggregate principal of its 4.625 % Senior Notes.

Repurchases of 4.625 % Senior Notes on the open market (excluding those from a tender offer) during the periods presented were as follows (in thousands):

December 31, 2022

Principal repurchased $ 181,238

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(Gain) loss on repurchase (1)

$ ( 12,060 ) $ 644

(1) Presented within ‘Gain (loss) on debt extinguishment, net’ on the Consolidated Statements of Operations.

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Unamortized discount

Debt issuance costs ( 779 ) ( 874 )

( 2,148 ) ( 2,463 )

Deferred issuance costs

( 679 ) ( 779 )

Net carrying amount of 4.625 % Senior Notes

$ 457,211 $ 456,796

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The following table provides the components of interest expense related to 4.625 % Senior Notes (in thousands):

Year ended December 31,

Years ended December 31,

2024 2023 2022

Coupon interest expense $ 21,269 $ 21,159 $ 24,500

Non-cash amortization of discount on 4.625 % Senior Notes

Amortization of debt issuance costs 95 109 66

Amortization of discount and debt issuance costs

Total interest expense related to 4.625 % Senior Notes

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1.75 % Convertible Notes

On June 10, 2014, the Company issued $ 402.5 million aggregate principal amount of 3.25 % convertible senior notes due June 15, 2029 (the “ 3.25 % Convertible Notes”).

The 3.25 % Convertible Notes bear interest at a rate of 3.25 % per annum, payable semiannually in arrears on June 15 and December 15 of each year.

Beginning with the six-month interest period commencing on June 15, 2021, the Company had to pay contingent interest on the 3.25 % Convertible Notes during any six-month interest period if the trading price per $1,000 principal amount of the 3.25 % Convertible Notes for each of the five trading days immediately preceding the first day of such interest period equaled or exceeded $ 1,300 .

Any contingent interest payable on the 3.25 % Convertible Notes would have been in addition to the regular interest payable on the 3.25 % Convertible Notes.

In connection with the Separation, the Company redeemed in full all of its outstanding 3.25 % Convertible Notes.

During the year ended December 31, 2021, the Company satisfied its conversion obligation by paying the principal of $ 402.4 million in cash and issued 3,050,850 shares of the Company’s common stock.

Refer to Note 14 — Stockholders’ Equity for additional details.

The redemption of the liability component of the 3.25 % Convertible Notes, resulted in a gain of approximately $ 2.8 million during the year ended December 31, 2021 within ‘Gain (loss) on debt extinguishment, net’ on our Consolidated Statement of Operations.

The reacquisition of the equity component of the 3.25 % Convertible Notes resulted in a reduction of stockholders’ equity of approximately $ 390.5 million, net of tax.

The following table provides the components of interest expense related to the 3.25 % Convertible Notes (in thousands):

December 31, 2021

Coupon interest expense $ 5,994

Non-cash amortization of discount on 3.25 % Convertible Notes

Amortization of debt issuance costs 855

Total interest expense related to 3.25 % Convertible Notes

No changes in fair value associated with the contingent interest feature of the 3.25 % Convertible Notes in interest expense were recorded for the years ended December 31, 2021.

1.75 % Convertible Notes

On November 15, 2019, the Company issued $ 550.0 million aggregate principal amount of 1.75 % convertible senior notes due November 1, 2026 (the “ 1.75 % Convertible Notes”).

The Company received proceeds of $ 537.1 million in cash, net of purchasers’ discounts and commissions and other debt issuance costs.

A portion of the net proceeds were used to pay off all amounts outstanding under the then-existing Credit Facility.

A portion of the net proceeds were used to pay off all

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amounts outstanding under the then-existing Credit Facility.

The 1.75 % Convertible Notes bear interest at a rate of 1.75 % per annum, payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2020.

The 1.75 % Convertible Notes will mature on November 1, 2026, unless earlier converted or repurchased.

On July 16, 2024, the Company exchanged approximately $ 400.9 million in aggregate principal amount of its 1.75 % Convertible Notes as part of the Exchange Transaction, as defined below.

As of December 31, 2024, the remaining principal amount of the 1.75 % Convertible Notes was $ 149.1 million.

The Company also paid outstanding and accrued interest of $ 1.5 million on the exchanged 1.75 % Convertible Notes during 2024.

Under certain conditions set forth in the indenture, the 1.75 % Convertible Notes bear additional interest of 0.50 % per annum payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2021.

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As such, the cumulative $ 7.7 million interest expense was non-recurring.

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Holders may surrender their 1.75 % Convertible Notes for conversion at any time prior to the close of business on the business day immediately preceding July 1, 2026 only under the following circumstances:

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On or after July 1, 2026, and prior to the close of business on the business day immediately preceding the maturity date, holders may convert all or any portion of their notes at any time, regardless of the foregoing circumstances.

The Company will settle conversions of the 1.75 % Convertible Notes by paying or delivering, as the case may be, cash, shares of the Company’s common stock or a combination thereof at the Company’s election.

The Company currently intends to satisfy its conversion obligation by paying and delivering a combination of cash and shares of the Company’s common stock.

The 1.75 % Convertible Notes can be settled in cash, the Company’s common stock, or a combination of cash and the Company’s common stock, at $ 0.01 par value per share, at the Company’s election The Company will settle conversions of the 1.75 % Convertible Notes by paying or delivering, as the case may be, cash, shares of the Company’s common stock or a combination thereof at the Company’s election.

Holders of the notes will have the right to require the Company to repurchase for cash all or any portion of their notes upon the occurrence of certain corporate events, subject to certain conditions.

As of December 31, 2024 and December 31, 2023, the market trigger conditions did not meet the conversion requirements of the 1.75 % Convertible Notes and, accordingly, the 1.75 % Convertible Notes are classified as long-term debt on our Consolidated Balance Sheets.

Prior to the Separation, the conversion rate on the 1.75 % Convertible Notes was 7.9864 shares of the Company’s common stock for each $1,000 principal amount of 1.75 % Convertible Notes, which represents a conversion price of approximately $ 125.21 per share of the Company’s common stock.

The Separation constituted an event under the 1.75 % Convertible Notes that required an adjustment and the conversion rate increased to 9.3783 shares of the Company’s common stock for each $1,000 principal amount of 1.75 % Convertible Notes (or 5,158,071 shares), which represents a conversion price of approximately $ 106.63 per share of the Company’s common stock.

The conversion rate is subject to adjustment for certain events as set forth in the indenture governing the 1.75 % Convertible Notes, but will not be adjusted for accrued interest.

In addition, upon the occurrence of a “Make-Whole Fundamental Change” (as defined in the 1.75 % Convertible Note Indenture), the Company will increase the conversion rate for a holder that elects to convert its 1.75 % Convertible Notes in connection with such a corporate event in certain circumstances.

Prior to the Separation, the conversion rate on the 1.75 % Convertible Notes was 7.9864 shares of the Company’s common stock for each $1,000 principal amount of 1.75 % Convertible Notes, which represented a conversion price of approximately $ 125.21 per share of the Company’s common stock.

The Separation constituted an event under the 1.75 % Convertible Notes that required an adjustment and the conversion rate increased to 9.3783 shares of the Company’s common stock for each $1,000 principal amount of 1.75 % Convertible Notes which represents a conversion price of approximately $ 106.63 per share of the Company’s common stock.

As of December 31, 2024 and December 31, 2023, this rate equated to 1,398,391 shares and 5,158,071 shares, respectively.

The conversion rate is subject to adjustment for certain events as set forth in the indenture governing the 1.75 % Convertible Notes but will not be adjusted for accrued and unpaid interest.

In addition, upon the occurrence of a “Make-Whole Fundamental Change” (as defined in the 1.75 % Convertible Note Indenture), in certain circumstances, the Company will increase the conversion rate for a holder that elects to convert its 1.75 % Convertible Notes in connection with such a corporate event.

The Company may not redeem the 1.75 % Convertible Notes prior to November 1, 2026, and no sinking fund is provided for the 1.75 % Convertible Notes.

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and (iv) structurally junior to all existing and future indebtedness and other liabilities incurred by the Company’s subsidiaries.

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The following table provides additional information related to the 1.75 % Convertible Notes (in thousands):

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$ 149,109 $ 550,000

Carrying amount of debt issuance costs ( 5,484 ) ( 7,347 )

Deferred issuance costs

( 923 ) ( 5,484 )

Net carrying amount of 1.75 % Convertible Notes

$ 148,186 $ 544,516

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The following table provides the components of interest expense related to the 1.75 % Convertible Notes (in thousands):

Year ended December 31,

Years ended December 31,

2024 2023 2022

Coupon interest expense $ 6,429 $ 17,369 $ 9,776

Non-cash amortization of discount on 1.75 % Convertible Notes

Amortization of debt issuance costs 1,251 1,863 1,858

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$ 7,680 $ 19,232 $ 11,634

(1) On January 1, 2022 the Company adopted ASU 2020-06 using the modified retrospective method.

At the time of adoption, the Company de-recognized the remaining unamortized debt discount.

No amortization of debt discount was recorded during the years ended December 31, 2023 and December 31, 2022, respectively.

Accounting for the 1.75 % Convertible Notes

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In connection with the issuance of the 1.75 % Convertible Notes, the Company incurred $ 12.9 million of deferred issuance costs, which primarily consisted of the underwriters’ discount, legal and other professional service fees.

Of the total deferred issuance costs incurred, $ 10.1 million was attributable to the liability component and is being amortized, at an effective interest rate of 5.5 %, to interest expense through the maturity date.

Of the total deferred issuance costs incurred, $ 10.1 million was attributable to the liability component and is being amortized to interest expense through the maturity date at an effective interest rate of 5.5 % .

The remaining $ 2.8 million of the deferred issuance costs were netted with the equity component in additional paid-in capital at the issuance date.

Upon adoption of ASU 2020-06, the Company reclassified the $ 2.8 million from additional paid-in-capital to long-term liability and recorded a cumulative adjustment to retained earnings for amortization from the issuance date through January 1, 2022.

3.625 % Convertible Notes

On July 16, 2024, the Company issued $ 263.1 million in aggregate principal amount of new 3.625 % Convertible Notes due 2028 (the “ 3.625 % Convertible Notes”) and paid an aggregate of approximately $ 135.0 million in cash in exchange for approximately $ 400.9 million in aggregate principal amount of the Company’s 1.75 % Convertible Notes (collectively, the “Exchange Transaction”) pursuant to separate, privately negotiated exchange agreements with certain holders of the 1.75 % Convertible Notes.

The Exchange Transaction was accounted for as a debt modification, and accordingly, no gain or loss was recognized.

In connection with the Exchange Transaction, the Company recognized an increase in the fair value of the conversion feature of the 3.625 % Convertible Notes compared to the fair value of the conversion feature of the 1.75 % Convertible Notes of $ 4.0 million, partially offset by an increase to deferred tax liabilities of $ 1.0 million, which is included in ‘Additional paid-in capital’ on the Consolidated Balance Sheets, and a corresponding reduction to the carrying value of the 3.625 % Convertible Notes.

The discount and deferred issuance costs are being amortized to interest expense through the maturity date at an effective interest rate of 4.2 %.

The 3.625 % Convertible Notes bear interest at a rate of 3.625 % per annum on the principal amount thereof, payable semi-annually in arrears on September 1 and March 1 of each year, beginning on March 1, 2025, to the noteholders of record of the 3.625 % Convertible Notes as of the close of business on the immediately preceding August 15 and February 15, respectively.

The 3.625 % Convertible Notes will mature on March 1, 2028, unless earlier converted or repurchased.

The 3.625 % Convertible Notes can be settled in cash, the Company’s common stock, or a combination of cash and the Company’s common stock, at $ 0.01 par value per share, at the Company’s election.

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Holders may surrender their 3.625 % Convertible Notes for conversion at any time prior to the close of business on the business day immediately preceding December 1, 2027 only under the following circumstances:

(i) during any calendar quarter commencing after the calendar quarter ending on September 30, 2024 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the applicable conversion price of the 3.625 % Convertible Notes on each such applicable trading day;

(ii) during the 5 business day period following any 10 consecutive trading day period in which the trading price per $1,000 principal amount of 3.625 % Convertible Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on each such trading day;

or (iii) upon the occurrence of specified corporate events.

On or after December 1, 2027, and prior to the close of business on the business day immediately preceding the maturity date, holders may convert all or any portion of their notes at any time, regardless of the foregoing circumstances, at an initial conversion rate of 10 shares of the Company’s common stock per $1,000 principal amount of 3.625 % Convertible Notes.

The Company will settle conversions of the 3.625 % Convertible Notes by paying or delivering, as the case may be, cash, shares of the Company’s common stock or a combination thereof at the Company’s election.

As of December 31, 2024, the market trigger conditions did not meet the conversion requirements of the 3.625 % Convertible Notes and, accordingly, the 3.625 % Convertible Notes are classified as long-term debt on our Consolidated Balance Sheets.

As of December 31, 2024, the conversion rate of the 3.625 % Convertible Notes is 10 shares per $1,000 principal amount of the 3.625 % Convertible Notes (or 2,631,470 shares), which represents an initial conversion price of $ 100 per share.

The conversion rate is subject to adjustment upon the occurrence of certain specified events as set forth in the indenture governing the 3.625 % Convertible Notes, but will not be adjusted for accrued and unpaid interest.

In addition, upon the occurrence of a “Make-Whole Fundamental Change”, as defined in the 3.625 % Convertible Note Indenture, the Company will in certain circumstances increase the conversion rate for a holder that elects to convert its 3.625 % Convertible Notes in connection with such a corporate event.

The Company may not redeem the 3.625 % Convertible Notes prior to the maturity date, and no sinking fund is provided for the 3.625 % Convertible Notes.

The 3.625 % Convertible Notes are the Company’s general senior unsecured obligations and rank:

(i) senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the 3.625 % Convertible Notes;

(ii) equal in right of payment to the Company’s existing and future indebtedness that is not so subordinated;

(iii) effectively junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness;

and (iv) structurally junior to all existing and future indebtedness and other liabilities incurred by the Company’s subsidiaries.

The following table provides additional information related to the 3.625 % Convertible Notes (in thousands):

December 31, 2024

Principal amount of 3.625 % Convertible Notes

Unamortized discount

Deferred issuance costs

Net carrying amount of 3.625 % Convertible Notes

The following table provides the components of interest expense related to the 3.625 % Convertible Notes (in thousands):

December 31, 2024

Coupon interest expense $ 4,372

Amortization of discount and debt issuance costs 571

Total interest expense related to 3.625 % Convertible Notes

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Credit Agreement

On April 7, 2021, the Company entered into a $ 100.0 million Credit Agreement (the “Credit Agreement”).

Subject to certain conditions and approvals, the Company may, from time to time, request increases in the commitments under the Credit Agreement in an aggregate amount up to $ 250.0 million, for a total aggregate commitment of up to $ 350.0 million.

The final maturity of the Credit Facility will occur on April 7, 2026.

At the Company’s option, amounts borrowed under the Credit Agreement will bear interest at either (i) a base rate equal to the greater of (x) the Federal Funds Effective Rate (as defined in the Credit Agreement) in effect on such day plus 0.5 % per annum, (y) the rate of interest per annum most recently announced by the Agent (as defined in the Credit Agreement) as its U.S.

Subject to certain conditions and approvals, the Company had the right, from time to time, to request increases in the commitments under the Credit Agreement in an aggregate amount up to $ 250.0 million, for a total aggregate commitment of up to $ 350.0 million.

On June 18, 2024, the Company entered into a New Lender Joinder Agreement and Eighth Amendment (the “Joinder and Amendment”) to the Credit Agreement.

The Joinder and Amendment provides for, among other things, (i) an increase in the Aggregate Revolving Loan Commitment by an aggregate principal amount of $ 250.0 million for a total of $ 350.0 million, (ii) an extension of the scheduled maturity date from April 7, 2026 to the earlier of (x) June 18, 2027 or (y) under certain limited circumstances, August 2, 2026, (iii) a “credit spread adjustment” for SOFR-based borrowings of 0.10 % across all interest periods, (iv) the inclusion of limited conditionality borrowing mechanics with respect to certain borrowings and (v) certain other related amendments.

At the Company’s option, amounts borrowed under the Credit Agreement bear interest at either (i) a base rate equal to the greater of (x) the Federal Funds Effective Rate (as defined in the Credit Agreement) in effect on such day plus 0.5 % per annum, (y) the rate of interest per annum most recently announced by the Agent (as defined in the Credit Agreement) as its U.S.

Dollar “Reference Rate” and (z) one month Term SOFR (as defined in the Credit Agreement) plus a credit spread adjustment plus 1.00 % or (ii) a rate per annum equal to Term SOFR plus a credit spread adjustment, in each case, plus an applicable margin.

The applicable margin relating to any base rate loan will range from 0.50 % to 1.25 % and the applicable margin relating to any Term SOFR loan will range from 1.50 % to 2.25 %, in each case, depending on the total leverage ratio of the Company.

The applicable margin relating to any base rate loan ranges from 0.50 % to 1.25 % and the applicable margin relating to any Term SOFR loan ranges from 1.50 % to 2.25 %, in each case, depending on the total leverage ratio of the Company.

The Company is permitted to make voluntary prepayments of the Credit Facility at any time without payment of a premium or penalty.

The Credit Agreement is secured by an associated collateral agreement that provides for a lien on the majority of the Company’s assets and the assets of the guarantors, in each case, subject to customary exceptions.

As of December 31, 2023, there were no amounts outstanding under the Credit Agreement.

The Credit Agreement contains financial maintenance covenants, including (i) a maximum total leverage ratio as of the last date of any fiscal quarter not to exceed 4.00 :1.00 for the Company and its restricted subsidiaries and (ii) a minimum interest coverage ratio as of the last date of any fiscal quarter not less than 3.00 :1.00 for the Company and its restricted subsidiaries.

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The Company is in compliance with its debt covenants for the Credit Agreement as of December 31, 2024.

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On June 2, 2021, June 21, 2021, August 20, 2021 and September 16, 2021, the Company entered into First, Second, Third, and Fourth Amendments (together the “Amendments”) to the Credit Agreement, respectively.

The Amendments (i) provided for the issuance of a senior secured term loan under the Credit Agreement, in an aggregate principal amount of $ 485.0 million (the “Bridge Loan Facility”), (ii) permitted the spin-off of the Company’s cloud fax business into a new publicly traded company, and (iii) provided for certain other changes to the Credit Agreement.

The Bridge Loan Facility bore interest at a rate per annum equal to (i) initially upon funding of the loan, either a base rate plus 2.00 %, or a LIBOR rate plus 3.00 %, (ii) from six months after the funding date of the Bridge Loan Facility until twelve months after the funding date of the Bridge Loan Facility, either a base rate plus 2.50 %, or a LIBOR rate plus 3.50 %, and (iii) from twelve months after the funding date of the Bridge Loan Facility until repayment of the Bridge Loan Facility, either a base rate plus 3.00 % or a LIBOR rate plus 4.00 %.

The Bridge Loan Facility was to mature on the date that was 364 days after the funding date of the Bridge Loan Facility, with two automatic extensions, each for an additional three months, if SEC approval of the spin-off transaction was still outstanding.

The Company was required to pay a funding fee of 0.50 % of the aggregate principal amount of Bridge Loan Facility made on the funding date thereof, as well as a duration fee of 0.25 % of the aggregate principal amount of outstanding Bridge Loans on the sixth month anniversary of the funding of the Bridge Loans, and a fee of 0.50 % of the aggregate principal amount of outstanding Bridge Loans on each of the nine-month, twelve-month and fifteen-month anniversaries of the funding of the Bridge Loans.

The Company incurred approximately $ 6.3 million ($ 5.2 million in the third quarter of 2021 and $ 1.1 million in the fourth quarter of 2021) in costs and interest associated with the Bridge Loan Facility recorded within ‘Interest and other expense’ component of ‘Income (loss) from discontinued operations, net of income taxes’ within the Consolidated Statements of Operations for the year ended December 31, 2021.

In connection with the spin-off of Consensus, the Company drew the full amount of the Bridge Loan Facility and used the proceeds of the Bridge Loan Facility to redeem the 3.25 % Convertible Notes and a portion of the 4.625 % Senior Notes.

On October 7, 2021, Consensus issued $ 500.0 million of senior notes due 2028 to Ziff Davis, which Ziff Davis then exchanged such notes with the lenders under the Credit Agreement and Credit Agreement Amendments by and among the subsidiaries of Ziff Davis party thereto as guarantors, Citicorp North America Inc.

and MUFG Union Bank, N.A.

and MUFG Union Bank, N.A., as administrative agent for the lenders, in exchange for the extinguishment of the indebtedness outstanding under the Bridge Loan Facility.

Such lenders or their affiliates agreed to resell the 2028 notes to qualified institutional buyers in the United States pursuant to Rule 144A.

The Company incurred a net loss on extinguishment of approximately $ 8.8 million recorded within ‘Gain (loss) on debt extinguishment, net’ component of ‘Income (loss) from discontinued operations, net of income taxes’ within the Consolidated Statements of Operations for the year ended December 31, 2021.

On June 10, 2022 (the “Term Loan Funding Date”), the Company entered into a Fifth Amendment to its Credit Agreement with MUFG Union Bank, N.A, as administrative agent and collateral agent and the lenders party thereto to effectuate the debt-for-equity exchange.

As of each December 31, 2024 and December 31, 2023, net availability under the Credit Agreement was $ 348.9 million and $ 100.0 million, respectively, net of letters of credit.

The Fifth Amendment to the Credit Agreement provided for the Term Loan Facility in an aggregate principal amount of $ 90.0 million and certain other changes to the Credit Agreement.

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During June 2022, the Company borrowed approximately $ 90.0 million under the Term Loan Facility and completed the non-cash debt-for-equity exchange of 2,300,000 shares of its common stock of Consensus to settle its obligation of $ 90.0 million outstanding aggregate principal amount of the Term Loan Facility plus an immaterial amount of interest.

On September 15, 2022 (the “Term Loan Two Funding Date”), the Company entered into a Sixth Amendment to its Credit Agreement with MUFG Union Bank, N.A, as administrative agent and collateral agent and the lenders party thereto to effectuate the debt-for-equity exchange.

The Sixth Amendment to the Credit Agreement provided for the Term Loan Two Facility in an aggregate principal amount of approximately $ 22.3 million and certain other changes to the Credit Agreement.

The Term Loan Two Facility had a maturity date that was 60 days after the Term Loan Two Funding Date.

The Term Loan Two Facility bore interest at a base rate equal to the greater of (x) the Federal Funds Effective Rate, as defined in the Credit Agreement, in effect on such day plus 0.5 % per annum, (y) the rate of interest per annum most recently announced by the Agent, as defined in the Credit Agreement, as its U.S.

Dollar “Reference Rate” and (z) one month LIBOR plus 1 %, provided that the base rate for any term loan made under the Credit Agreement shall be greater of clause (x) and (y) above in each case.

During September 2022, the Company borrowed approximately $ 22.3 million under the Term Loan Two Facility and completed the non-cash debt-for-equity exchange of 500,000 shares of its common stock of Consensus to settle its obligation of $ 22.3 million outstanding aggregate principal amount of the Term Loan Two Facility plus an immaterial amount of interest.

The Term Loan Two Facility bore interest at a base rate equal to the greater of (x) the Federal Funds Effective Rate, as defined in the Credit Agreement, in

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effect on such day plus 0.5 % per annum, (y) the rate of interest per annum most recently announced by the Agent, as defined in the Credit Agreement, as its U.S.

Dollar “Reference Rate” and (z) one month LIBOR plus 1 %, provided that the base rate for any term loan made under the Credit Agreement shall be greater of clause (x) and (y) above in each case.

As of December 31, 2022, the Company recorded a loss on extinguishment of debt of approximately $ 0.6 million, related to the debt-for-equity exchanges, which is presented within ‘Gain (loss) on debt extinguishment, net’ on our Consolidated Statements of Operations.

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Some of the Company’s leases include options to terminate within one year.

During the year ended December 31, 2023, 2022, and 2021, the Company recorded impairments of $ 2.2 million, $ 1.0 million, and $ 12.7 million, respectively on its operating lease right of use assets within Digital Media and Cybersecurity and Martech primarily related to exiting certain lease space as the Company regularly evaluates its office space requirements in light of more of its workforce working from home as part of a “remote” or “partial remote” work model.

The impairments were determined by comparing the fair value of the impacted right-of-use asset to the carrying value of the asset as of the impairment measurement date, as required under ASC 360, Property, Plant, and Equipment .

During the year ended December 31, 2024, 2023, and 2022, the Company recorded impairments of $ 0.9 million, $ 2.2 million, and $ 1.0 million, respectively on its operating lease right of use assets within various reportable segments primarily related to exiting certain lease space as the Company regularly evaluates its office space requirements in light of more of its workforce working from home as part of a “remote” or “partial remote” work model.

The fair value of the right-of-use asset was based on the estimated sublease income for the affected facilities taking into consideration the time it will take to obtain a sublease tenant, the applicable discount rate and the sublease rate which represent Level 3 unobservable inputs.

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Total operating lease liabilities $ 30,463 $ 32,427

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The components of lease expense are as follows (in thousands):

7 unchanged sentences

Weighted average discount rate 4.28 % 3.27 %

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As of December 31, 2024, maturities of operating lease liabilities were as follows (in thousands):

2024 $ 16,950

Thereafter 3,995

10 unchanged sentences

The outcomes of such matters are subject to inherent uncertainties, carrying the potential for unfavorable rulings that could include monetary damages and injunctive relief.

The Company does not believe, based on current knowledge, that any such legal proceedings or claims, including those set forth below, after giving effect to existing accrued liabilities, are likely to have a material adverse effect on the Company’s overall consolidated financial position, results of operations, or cash flows.

However, depending on the amount and timing, an unfavorable resolution of some or all of these matters could have a material effect on the Company’s consolidated financial position, results of operations, or cash flows in a particular period.

Although the Company cannot predict the outcome of legal or other proceedings with certainty, where there is at least a reasonable possibility that a loss may be incurred, GAAP requires us to disclose an estimate of the reasonably possible loss or

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range of loss or make a statement that such an estimate cannot be made.

The Company follows a thorough process in which it seeks to estimate the reasonably possible loss or range of loss, and only if it is unable to make such an estimate does it conclude and disclose that an estimate cannot be made.

Accordingly, unless otherwise indicated below in our discussion of litigation, a reasonably possible loss or range of loss associated with any individual legal proceeding cannot be estimated.

On July 8, 2020, Jeffrey Garcia filed a putative class action lawsuit against the Company in the Central District of California (20-cv-06096), alleging violations of federal securities laws.

4 unchanged sentences

On August 8, 2022, the court granted the Company’s motion to dismiss the amended complaint without leave to amend.

The lead plaintiff has filed a notice of appeal and the matter is pending on appeal.

On September 24, 2020, International Union of Operating Engineers of Eastern Pennsylvania and Delaware filed a lawsuit in the Delaware Court of Chancery (C.A.

2020-0819-VCL) asserting derivative claims for breach of fiduciary duty and related theories against directors of the Company and other third parties relating generally to the investment by the Company in OCV Fund I, L.P.

(the “Chancery Court Derivative Action”).

On November 17, 2020, the court entered an order allowing Orlando Police Pension Fund to intervene as a plaintiff in the case.

The parties reached an agreement to settle the lawsuit, which required court approval.

On July 29, 2021, the parties filed a stipulation of settlement that provided the terms of the settlement and began the settlement approval process with the court.

On January 20, 2022, the Court approved the settlement.

Among other terms of the settlement, no further management fees will be charged and no further capital calls will be made in connection with the Company’s investment in OCV Fund I, L.P.

The lead plaintiff appealed the dismissal.

On April 19, 2024, the Ninth Circuit Court of Appeals affirmed the dismissal.

On December 11, 2020, Danning Huang filed a lawsuit in the District of Delaware (20-cv-01687-LPS) asserting derivative claims against directors of the Company and other third parties.

2 unchanged sentences

20-cv-01687-LPS.

As part of the settlement of the Chancery Court Derivative Action described above, the Company and its directors and officers intend to defend against the remaining claims in these other actions.

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The Company does not believe, based on current knowledge, that the foregoing legal proceedings or claims, after giving effect to existing accrued liabilities, are likely to have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows.

On June 4, 2024, the plaintiffs in the consolidated case dismissed their claims without prejudice.

The Company has not accrued for any material loss contingencies relating to these legal proceedings because materially unfavorable outcomes are not considered probable by management.

2 unchanged sentences

The Company does not collect and remit sales and use, telecommunication, or similar taxes and fees in certain jurisdictions where the Company believes such taxes are not applicable or legally required.

Several states and other taxing jurisdictions have presented or threatened the Company with assessments, alleging that the Company recognizes a liability for these matters when it is probable that an obligation exists and the amount can be reasonably estimated based on all relevant information that is available at each reporting period.

The Company established reserves for these matters of $ 28.1 million and $ 25.5 million as of December 31, 2023 and 2022, respectively, which are included within ‘Accounts payable’ and ‘Other long-term liabilities’ on the Consolidated Balance Sheet.

It is reasonably possible that additional liabilities could be incurred resulting in additional expense, which could have a material impact to our financial results.

Several states and other taxing jurisdictions have presented or threatened the Company with assessments, alleging that the Company is required to collect and remit such taxes there.

The Company is currently under audit or is subject to audit for indirect taxes in various states, municipalities, and foreign jurisdictions.

The Company recognizes a liability for these matters when it is probable that an obligation exists and the amount can be reasonably estimated based on all relevant information that is available at each reporting period.

The Company established reserves for these matters of $ 25.2 million and $ 28.1 million as of December 31, 2024 and December 31, 2023, respectively, which are included in ‘Accounts payable and accrued expenses’ and ‘Other noncurrent liabilities’ on the Consolidated Balance Sheet.

It is reasonably possible that additional liabilities could be incurred resulting in additional expense, which could have a material impact to our financial results, however, as of December 31, 2024, any potential range of loss was not estimable.

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The continuing operations income tax (expense) benefit consisted of the following (in thousands):

Year ended December 31,

Years ended December 31,

2024 2023 2022

7 unchanged sentences

Total deferred 18,822 30,017 12,991

Income tax (expense) benefit from continuing operations $ ( 24,142 ) $ ( 57,957 ) $ 14,199

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Income tax expense from continuing operations

$ ( 41,370 ) $ ( 24,142 ) $ ( 57,957 )

A reconciliation of the statutory federal income tax rate with the Company’s continuing operations effective income tax rate is as follows:

Year ended December 31,

Years ended December 31,

2024 2023 2022

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Effective tax rates 44.4 % 32.2 % 44.2 %

The effective tax rate for continuing operation for the year ended December 31, 2024 differs from the federal statutory rate primarily due to the expense recognized for book purposes on the goodwill impairment related to two of the Company’s reporting units that resulted in no corresponding tax benefit and a tax expense recognized due to recording a valuation allowance related to the Company’s U.S.

capital loss carryforwards.

The detrimental impact to our effective tax rate was partially offset by a tax benefit recognized as a result of a decrease in the reserve for uncertain tax positions that was primarily due to the lapse of the statute of limitations.

The effective tax rate for continuing operations for the year ended December 31, 2023 differs from the federal statutory rate primarily due to the expense recognized for book purposes on the goodwill impairment related to one of the Company’s reporting units that resulted in no corresponding tax benefit and had a detrimental impact to the effective tax rate.

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The effective tax rate for continuing operations for the year ended December 31, 2022 differs from the federal statutory rate primarily due to a book-tax difference related to the loss recognized for accounting purposes related to the Company’s shares held in Consensus stock.

The Company recognized a deferred tax liability resulting in tax expense of $ 13.4 million on the outside basis difference between the book basis exceeding the tax basis of the Investment in Consensus on October 7, 2022 due to future disposals of the shares being subject to tax based on guidance and requirements set out by the Internal Revenue Service.

Additional reasons the effective tax rate differs from the federal statutory tax rate is due to income earned in the United States also being subject to income taxes in various state jurisdictions with statutory tax rates that can range from 2.5 percent to 11.5 percent.

The effective tax rate also differs from the federal statutory tax rate due to income earned in the United States also being subject to income taxes in various state jurisdictions with statutory tax rates that can range from 2.5 percent to 11.5 percent.

This increase in the effective income tax rate is offset by a decrease in the net reserve for uncertain tax positions during 2022 and a tax benefit claimed in the United States related to a deduction for foreign-derived intangible income.

1 unchanged sentence

tax reserves.

The effective tax rate for continuing operations for 2021 differs from the federal statutory rate primarily due to a book-tax difference related to the $ 298.5 million of book income recognized related to the Company’s shares held in Consensus stock.

The income was not subject to tax since the Company had the ability to dispose of the investment in a tax-free manner based on guidance and requirements set out by the Internal Revenue Service.

Additionally, the Company recorded a decrease in the net reserve for uncertain tax positions during 2021 and a reduction in the valuation allowance on deferred tax assets related to realized and unrealized capital losses.

The decrease in the reserve for uncertain tax positions is primarily due to the lapse of the statute of limitations for U.S.

tax reserves.

The reduction in the valuation allowance is primarily due to an increase in unrealized capital gains on investments held by the Company which can provide a source of capital gain income in future years to realize the benefit of the capital losses.

The Organization for Economic Co-operation and Development (“OECD”) established a Pillar Two Framework that was supported by over 130 countries worldwide.

On December 15, 2022, the European Union (“EU”) Member States adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15% with effective dates of January 1, 2024 and January 1, 2025, for different aspects of the directive.

A significant number of other countries are also implementing similar legislation.

The Company is continuing to evaluate the impact on future periods of the Pillar Two Framework and pending legislative adoption by additional individual countries in which we operate.

Although we are unable to

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predict when and how the Pillar Two Framework will be enacted into law, based on the countries in which we operate, the Company does not believe that the adoption of the Pillar Two Framework will have a material effect on our liability for corporate taxes and our consolidated effective tax rate.

The Company has analyzed the impact of the Pillar Two framework’s corporate minimum income tax rate of 15% and does not expect that it will have a material effect on the Company’s liability for corporate taxes and the Company’s consolidated effective tax rate.

Deferred tax assets and liabilities result from differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities.

10 unchanged sentences

Deferred revenue 3,413 2,420

Convertible debt

State taxes 2,526 1,974

11 unchanged sentences

Net deferred tax liabilities $ ( 38,532 ) $ ( 36,772 )

The Company had approximately $ 76.9 million and $ 80.8 million in deferred tax assets, net of valuation allowances as of December 31, 2023 and 2022, respectively, related primarily to net operating loss, operating lease liabilities, interest expense and capital loss carryforwards, tax credit carryforwards, capitalized research and development expenses, and accrued expenses being treated differently between its financial statements and its tax returns.

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The Company had approximately $ 89.7 million and $ 76.9 million in deferred tax assets, net of valuation allowances as of December 31, 2024 and 2023, respectively, related primarily to capital loss carryforwards, net operating loss carryforwards, capitalized research and development expenses, fixed asset basis, and accrued expenses being treated differently between its financial statements and its tax returns.

Based on the weight of available evidence, the Company assesses whether it is more likely than not that some portion or all of a deferred tax asset will not be realized.

2 unchanged sentences

The Company had a valuation allowance on deferred tax assets from continuing operations of $ 7.7 million and $ 1.7 million as of December 31, 2024 and 2023, respectively.

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The rollforward of the valuation allowance on the deferred tax assets from continuing operations is as follows (in thousands):

Year ended December 31,

Years ended December 31,

2024 2023 2022

5 unchanged sentences

The Company estimates that all of the above-mentioned federal NOLs will be available for use before their expiration.

Approximately $ 7.5 million of the NOLs expire through 2037 depending on the year the loss was incurred and $ 1.6 million of the NOLs carry forward indefinitely.

As of December 31, 2023, the Company’s deferred tax assets include interest expense limitation carryovers of $ 1.9 million, which last indefinitely.

The Company also has federal capital loss limitation carryforwards as of December 31, 2023 of $ 21.8 million that begin to expire in 2026.

Approximately $ 3.2 million of the NOLs expire through 2031 depending on the year the loss was incurred.

As of December 31, 2024, the Company’s deferred tax assets included federal capital loss limitation carryforwards of $ 23.4 million that begin to expire in 2026 through 2029.

During 2024, the Company recognized a valuation allowance on the entire federal capital loss limitation carryforward.

In addition, as of December 31, 2024, the Company had available state research and development tax credit carryforwards of $ 4.1 million, which last indefinitely.

3 unchanged sentences

In addition, because of the various avenues in which to repatriate the earnings, it is not practicable to determine the amount of the unrecognized deferred tax liability related to the undistributed earnings if eventually remitted.

Certain taxes are prepaid during the year and, where appropriate, included within ‘Prepaid expenses and other current assets’ on the Consolidated Balance Sheet.

Certain taxes are prepaid during the year and, where appropriate, included within ‘Prepaid expenses and other current assets’ on the Consolidated Balance Sheets.

The Company’s prepaid taxes were $ 6.4 million and $ 4.7 million at December 31, 2024 and 2023, respectively.

7 unchanged sentences

As of December 31, 2024, the total amount of unrecognized tax benefits for continuing operations was $ 22.6 million, of which $ 21.2 million, if recognized, would affect the Company’s effective tax rate.

As of December 31, 2022, the total amount of unrecognized tax benefits for continuing operations was $ 34.2 million, of which $ 32.7 million, if recognized, would affect the Company’s effective tax rate.

As of December 31, 2021, the total amount of unrecognized tax benefits for continuing operations was $ 39.5 million, of which $ 35.6 million, if recognized, would affect the Company’s effective tax rate.

As of December 31, 2023, the total amount of unrecognized tax benefits for continuing operations was $ 29.2 million, of which $ 27.4 million, if recognized, would

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The aggregate changes in the balance of unrecognized tax benefits, which excludes interest and penalties, for 2023, 2022, and 2021, is as follows (in thousands):

Year ended December 31,

affect the Company’s effective tax rate.

The aggregate changes in the balance of unrecognized tax benefits, which excludes interest and penalties, for the years ended December 31, 2024, 2023, and 2022, is as follows (in thousands):

Years ended December 31,

2024 2023 2022

7 unchanged sentences

As of December 31, 2024, 2023, and 2022, the total amount of interest and penalties accrued was $ 7.4 million, $ 7.1 million, and $ 6.3 million, respectively, which is classified as a liability for uncertain tax positions on the Consolidated Balance Sheets.

In connection with the liability for unrecognized tax benefits, the Company recognized interest and penalty expense (benefit) in 2023, 2022, and 2021 of $ 0.7 million, $ 0.7 million, and $( 1.5 ) million, respectively.

In connection with the liability for unrecognized tax benefits, the Company recognized interest and penalty expense during the years ended December 31, 2024, 2023, and 2022 of $ 0.3 million, $ 0.7 million, and $ 0.7 million, respectively.

Uncertain income tax positions are reasonably possible to significantly change during the next 12 months as a result of completion of income tax audits and expiration of statutes of limitations.

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It is also reasonably possible that the Company’s reserves will be inadequate to cover the entire amount of any such income tax liability.

We conduct business on a global basis and as a result, one or more of our subsidiaries files income tax returns in the U.S.

We conduct business on a global basis and as a result, one or more of our subsidiaries file income tax returns in the U.S.

federal and in multiple state, local, and foreign tax jurisdictions.

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However, it is not currently possible to estimate the amount, if any, of such change.

ZIFF DAVIS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Stockholders’ Equity

In connection with the Separation, the Company called its 3.25 % Convertible Notes for redemption and during the year ended December 31, 2021, the Company issued 3,050,850 shares of the Company’s common stock in connection with that redemption (see Note 10 — Debt ).

On August 6, 2020, the Company’s Board of Directors approved a program authorizing the repurchase of up to ten million shares of the Company’s common stock through August 6, 2025 (the “2020 Program”).

The Company entered into certain Rule 10b5-1 trading plans to execute repurchases under the 2020 Program.

On August 2, 2024, the Board authorized (i) an increase in its 2020 Program pursuant to which the Company may purchase up to an additional five million shares of the Company’s common stock (the “Additional Authorization”) and (ii) an extension of the expiration date of the share repurchase program from August 6, 2025 to August 2, 2029.

As a result of the Additional Authorization, the aggregate number of shares of the Company’s common stock authorized for repurchase under the 2020 Program increased to up to 15 million shares of the Company’s common stock.

During the years ended December 31, 2024, 2023, and 2022, the Company repurchased 3,500,000 , 1,585,846 , and 736,536 shares, respectively, under the 2020 Program, at an aggregate cost of $ 181.8 million, $ 104.9 million, and $ 71.3 million, respectively (including excise tax).

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Periodically, participants in the Company’s stock plans surrender to the Company shares of stock to pay the exercise price or to satisfy tax withholding obligations arising upon the exercise of stock options or the vesting of restricted stock.

ZIFF DAVIS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

During the years ended December 31, 2024, 2023 and 2022, the Company purchased and retired 80,241 , 69,622 , and 72,886 shares at an aggregate cost of approximately $ 4.1 million, $ 4.6 million, and $ 7.0 million, respectively, from plan participants for this purpose.

Share-Based Compensation

The Company’s share-based compensation plans include the 2015 Stock Option Plan (the “2015 Plan”) and 2001 Employee Stock Purchase Plan (the “Purchase Plan”).

The Company’s share-based compensation plans include the Ziff Davis, Inc.

2024 Equity Incentive Plan (the “2024 Plan”), the 2015 Stock Option Plan (the “2015 Plan”), and 2001 Employee Stock Purchase Plan (the “Purchase Plan”).

Each plan is described below.

The 2015 Plan provides for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance share units, and other share-based awards.

4,200,000 shares of the Company’s common stock are authorized to be used for 2015 Plan purposes.

Options under the 2015 Plan may be granted at exercise prices determined by the Board of Directors, provided that the exercise prices shall not be less than the higher of the par value or 100 % of the fair market value of the Company’s common stock subject to the option on the date the option is granted.

As of December 31, 2023, 435,135 shares underlying options and 777,197 shares of restricted stock units were outstanding under the 2015 Plan.

On May 7, 2024, the 2024 Plan was approved by the stockholders of the Company and replaced the 2015 Stock Option Plan.

The 2024 Plan permits the Company to issue shares of common stock to or for the benefit of employees, consultants, and non-employee directors of the Company and its subsidiaries as part of their compensation.

The 2024 Plan provides for the grant of stock options, restricted stock, stock appreciation rights, restricted stock units, performance-based awards, and other incentive awards.

Shares authorized but unissued under the 2015 Plan that were not subject to outstanding awards under the 2015 Plan as of May 7, 2024 were canceled.

The total number of shares of the Company’s common stock that may be issued under the 2024 Plan shall not exceed 3,500,000 shares, plus any Returned Shares, as defined in the 2024 Plan, under the 2015 Plan, and any shares under the 2024 Plan that are subsequently forfeited, canceled, reacquired by the Company, satisfied or are otherwise terminated (other than by exercise) or used to pay tax withholding obligations with respect to outstanding awards issued under the 2024 Plan.

The 2024 Plan will expire on March 21, 2034, unless earlier terminated by the Board.

Awards outstanding under the 2015 Plan were not impacted by the approval of the 2024 Plan.

Collectively, the 2015 Plan and 2024 Plan are referred to herein as “Plans”.

As of December 31, 2024, 435,135 shares underlying options and 1,173,213 shares of restricted stock units were outstanding under the Plans.

As of December 31, 2024, there were 3,617,530 additional shares underlying options, shares of restricted stock, and other share-based awards available for grant under the 2024 Plan.

In connection with the Separation and pursuant to the anti-dilution provisions of the 2015 Plan, the number of shares underlying each stock-based award outstanding as of the date of the Separation was multiplied by a factor of approximately 1.09 and the related exercise price for the stock options was divided by a factor of approximately 1.09 , which was intended to preserve the intrinsic value of the awards prior to the Separation.

Further, the price targets for the Company’s market-based restricted stock units were reduced by $ 21.41 .

These adjustments to the Company’s equity compensation awards did not result in additional compensation expense.

Stock based compensation awards that were held by Consensus employees were terminated and replaced with awards issued under the Consensus stock compensation plan (including under the Purchase Plan).

Stock-based compensation expense through the Separation date for Consensus employees is included in results from discontinued operations.

Share-Based Compensation Expense

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Total share-based compensation expense $ 40,915 $ 31,920 $ 26,601

Stock Options

As of December 31, 2023, 2022, and 2021, options to purchase 271,959 , 217,567 , and 168,614 shares of common stock were exercisable under and outside of the 2015 Plan, at weighted average exercise prices of $ 68.97 , $ 68.97 , $ 67.62 , respectively.

Stock options generally expire after 10 years and vest over a 5 to 8 year period.

All stock option grants are approved by “outside directors” within the meaning of Internal Revenue Code Section 162(m).

ZIFF DAVIS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Stock Options

As of December 31, 2024, 2023, and 2022, options to purchase 326,351 , 271,959 , and 217,567 shares of common stock were exercisable under and outside of the Plans, at weighted average exercise prices of $ 68.97 , $ 68.97 , $ 68.97 , respectively.

Stock options generally expire after 10 years and vest over a 5 to 8 year period.

All stock option grants are approved by “outside directors” within the meaning of Internal Revenue Code Section 162(m).

Stock option activity for the years ended December 31, 2024, 2023, and 2022 is summarized as follows:

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440,574 $ 68.45

Granted — $ —

Exercised ( 5,439 ) $ 27.15

Adjustment due to Consensus Separation (1)

35,749 $ 68.25

Canceled — $ —

Options outstanding at December 31, 2022

435,135 $ 68.97

Granted — $ —

Exercised — $ —

Canceled — $ —

Options outstanding at December 31, 2023

9 unchanged sentences

102,128 $ 68.97 3.0 $ 0

(1) As noted above, in connection with the Consensus separation and pursuant to the anti-dilution provisions of the 2015 Plan, the number of shares underlying each stock option outstanding as of the date of the Separation was multiplied by a factor of approximately 1.09 and the related exercise price for the stock options was divided by a factor of approximately 1.09 , which was intended to preserve the intrinsic value of the awards prior to the Separation.

There were no stock option exercises in 2023.

The total intrinsic values of options exercised during the years ended December 31, 2022 and 2021 was $ 0.4 million and $ 5.8 million, respectively.

There were no stock option exercises in 2024 and 2023.

The total intrinsic values of options exercised during the year ended December 31, 2022 was $ 0.4 million.

The total fair value of options vested during the years ended December 31, 2024, 2023, and 2022 was $ 1.0 million, $ 1.0 million, and $ 1.1 million, respectively.

Cash received from options exercised under all share-based payment arrangements for the years ended December 31, 2022 and 2021 was $ 0.1 million, and $ 2.9 million, respectively.

The actual tax benefit realized for the tax deductions from option exercises under the share-based payment arrangements totaled $ 0.3 million and $ 1.9 million, respectively, for the years ended December 31, 2022 and 2021, respectively.

As of December 31, 2023, there was $ 1.9 million of total unrecognized compensation expense related to nonvested share-based compensation options granted under the 2015 Plan.

Cash received from options exercised under all share-based payment arrangements for the year ended December 31, 2022 was $ 0.1 million.

The actual tax benefit realized for the tax deductions from option exercises under the share-based payment arrangements totaled $ 0.3 million for the year ended December 31, 2022.

As of December 31, 2024, there was $ 1.0 million of total unrecognized compensation expense related to nonvested share-based compensation options granted under the Plans.

That expense is expected to be recognized ratably over a weighted average period of 1.1 years (i.e., the remaining requisite service period).

Fair Value Disclosure

The Company uses the Black-Scholes option pricing model to calculate the fair value of each option grant.

The expected volatility is based on historical volatility of the Company’s common stock.

The Company estimates the expected term based upon the historical exercise behavior of its employees.

The risk-free interest rate is based on U.S.

Treasury zero-coupon issues with a term equal to the expected term of the option assumed at the date of grant.

The Company uses an annualized dividend yield based upon the per share dividends declared by its Board of Directors.

Restricted Stock and Restricted Stock Units

The Company has awarded restricted stock and restricted stock units to its Board of Directors and senior staff pursuant to certain share-based compensation plans.

The Company has awarded restricted stock and restricted stock units to its Board and senior staff pursuant to the Plans.

Compensation expense resulting from restricted stock and restricted unit grants is measured at fair value on the date of grant and is recognized as share-based compensation expense over the applicable vesting period.

Vesting periods are approximately one year for awards to members of the Company’s Board of Directors, four or five years for senior staff (excluding market-based awards discussed below) and four to eight years for the Chief Executive Officer.

Vesting periods are approximately one year for awards to members of the Company’s Board, generally three or four years for senior staff (excluding market-based awards discussed below), and three to eight years for the Chief Executive Officer.

The Company granted 413,053 , 305,549 , and 154,022 shares of restricted stock units (excluding awards with market conditions below) during the years ended December 31, 2024, 2023, and 2022, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The Company has awarded certain key employees market-based restricted stock and market-based restricted stock units pursuant to the 2015 Plan.

The market-based awards have vesting conditions that are based on specified stock price targets of the Company’s common stock.

Market conditions were factored into the grant date fair value using a Monte Carlo valuation model, which utilized multiple input variables to determine the probability of the Company achieving the specified stock price targets with a 20-day and 30-day lookback (trading days).

The Company has awarded certain key employees market-based restricted stock (“PSAs”) and market-based restricted stock units (“PSUs”) pursuant to the Plans.

Market-based awards granted prior to 2024 have vesting conditions that are based on specific stock price targets of the company’s common stock.

During the years ended December 31, 2023 and 2022 the Company awarded 167,606 and 100,193 , respectively, PSUs at stock price targets ranging from $ 83.61 to $ 103.76 per share.

During the year ended December 31, 2024, the Company awarded 308,970 equity classified PSUs that vest in shares of the Company’s stock ranging from 0 % to 200 % of the award, based on the Company’s attainment of a relative Total Shareholder Return (“TSR”) target compared to the TSR of all listed companies in the market index over the respective one, two, and three-year performance periods.

Market conditions were factored into the grant date fair value using a Monte Carlo valuation model, which utilized multiple input variables to determine the probability of the Company and all listed companies in a market index achieving the relative TSR targets.

Share-based compensation expense related to an award with a market condition will be recognized over the requisite service period using the graded-vesting method regardless of whether the market condition is satisfied, provided that the requisite service period has been completed.

During the years ended December 31, 2023, 2022, and 2021 the Company awarded 167,606 , 100,193 , and 73,094 market-based restricted stock units at stock price targets ranging from $ 83.61 to $ 103.76 per share.

The per share weighted average grant-date fair values of the market-based restricted stock units granted during the years ended December 31, 2023, 2022, and 2021 were $ 70.06 , $ 87.11 , and $ 94.40 , respectively.

The weighted-average fair values of market-based restricted stock units granted have been estimated utilizing the following assumptions:

The per share weighted average grant-date fair values of PSUs granted during the years ended December 31, 2024, 2023, and 2022 were $ 87.17 , $ 70.06 , and $ 87.11 , respectively.

The assumptions used in determining the weighted-average fair values of PSUs granted during the periods presented are as follows:

2024 2023 2022

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Risk-free interest rate 4.3 % 4.1 % 1.8 %

Restricted stock award activity for the years ended December 31, 2023, 2022 and 2021 is set forth below:

Shares Weighted-Average

Restricted stock award (“RSA”) and PSA activity for the years ended December 31, 2024, 2023 and 2022 is set forth below:

Number of shares

Weighted average

Number of shares

Weighted average

Nonvested at January 1, 2022

220,782 $ 72.07 163,181 $ 36.27

Granted — — — —

Vested ( 67,762 ) 74.13 — —

Canceled ( 4,920 ) 77.92 — —

Adjustment due to Consensus Separation (1)

Nonvested at December 31, 2022

148,100 $ 70.93 163,181 $ 36.27

Granted — — — —

Vested ( 52,060 ) 72.29 — —

2 unchanged sentences

95,718 $ 70.17 163,181 $ 36.27

Granted — — — —

Vested ( 40,735 ) 71.73 — —

2 unchanged sentences

54,829 $ 68.97 163,181 $ 36.27

(1) As noted above, in connection with the Consensus separation and pursuant to the anti-dilution provisions of the 2015 Plan, the number of shares underlying each restricted stock award outstanding as of the date of the Separation was multiplied by a factor of approximately 1.09 and the market condition stock price target for marked-based restricted stock awards was also adjusted.

ZIFF DAVIS, INC.

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Restricted stock unit activity for the years ended December 31, 2024, 2023 and 2022 is set forth below:

Shares Aggregate

Number of shares

Weighted average

Number of shares (1)

Weighted average

Outstanding at January 1, 2022

299,023 $ 107.52 60,891 $ 86.78

Granted 154,022 94.47 100,193 87.11

1 unchanged sentence

Canceled ( 24,831 ) 94.02 ( 10,250 ) 89.73

Adjustment due to Consensus Separation (1)

Outstanding at December 31, 2022

343,955 $ 102.53 120,399 $ 87.04

Granted 305,549 76.80 167,606 70.06

2 unchanged sentences

Outstanding at December 31, 2023

506,425 $ 88.36 270,772 $ 77.09

Granted 413,053 64.60 308,970 87.17

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Outstanding at December 31, 2024

652,227 74.59 520,986 82.73

Vested and expected to vest at December 31, 2024

(1) As noted above, in connection with the Consensus separation and pursuant to the anti-dilution provisions of the 2015 Plan, the number of shares underlying each restricted stock unit outstanding as of the date of the Separation was multiplied by a factor of approximately 1.09 and the market condition stock price target for marked-based restricted stock units was also adjusted.

610,299 $ 74.53 499,185 $ 82.54

(1) Represents the number of shares at 100% achievement.

Aggregate intrinsic value of shares outstanding as of December 31, 2024 was $ 35.4 million and $ 28.3 million for RSUs and PSUs, respectively.

Aggregate intrinsic value for shares vested and expected to vest was $ 33.2 million and $ 27.1 million for RSUs and PSUs, respectively.

As of December 31, 2024, the Company had unrecognized share-based compensation cost of approximately $ 50.8 million associated with these restricted stock awards and restricted stock units.

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The components of basic and diluted earnings per share from continuing operations are as follows (in thousands, except share and per share data):

Year ended December 31,

Years ended December 31,

2024 2023 2022

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Convertible debt

— — 1,657,232

Diluted weighted-average outstanding shares of common stock 44,519,693 46,464,261 47,025,849

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(1) Represents unvested share-based payment awards that contain certain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid).

(2) Under the modified retrospective method of adoption of ASU 2020-06, the dilutive impact of convertible debt was calculated using the if-converted method for the years ended December 31, 2023 and 2022.

The dilutive impact of convertible debt was calculated using the treasury stock method for the years ended December 31, 2021 (see Note 10 — Debt ).

Segment Information

The Company’s businesses are based on the organizational structure used by the chief operating decision maker (“CODM”).

The Company aggregates its operating segments into two reportable segments:

Digital Media and Cybersecurity and Martech.

The accounting policies of the businesses are the same as those described in Note 2 — Basis of Presentation and Summary of Significant Accounting Policies.

The Company evaluates performance based on revenue and profit or loss from operations.

The Company’s businesses are based on the organizational structure used by the Chief Executive Officer of the Company, who acts as the chief operating decision maker (“CODM”).

Following changes to our internal reporting structure, the Company concluded that it has five operating segments which are now presented as the following five reportable segments:

1) Technology & Shopping, 2) Gaming & Entertainment, 3) Health & Wellness, 4) Connectivity, and 5) Cybersecurity & Martech.

The Technology & Shopping reportable segment primarily generates revenues from advertising on publishing platforms and commerce sites and through publishing of specialized technology-based content and provision of authoritative content relating to products, services, shopping and savings.

The Gaming & Entertainment reportable segment generates revenue by providing authoritative content relating to video games and entertainment and includes a video game and entertainment website focusing on games (including game help), films, anime, television, comics, technology, and other media.

It also generates revenues through subscriptions to and storefront sales of video games, ebooks, and software, as well as through related advertising.

The Health & Wellness reportable segment generates revenues from a collection of interactive tools and mobile applications that are designed to enable consumers to manage a broad array of health and wellness needs on a daily basis, including medical conditions, pregnancy, diet, and fitness, and from a collection of educational and professional development services, news, and information for healthcare professionals.

The Connectivity reportable segment includes several data and services businesses that sit at the center of the broadband economy and are sources of information on internet connectivity and network performance and primarily generates revenues through the granting of access to, or delivery of, data products or services to customers and the sale of perpetual software licenses, related software support, and maintenance.

The Cybersecurity & Martech reportable segment generates revenues from cloud-based Software-as-a-Service offerings for various communication, messaging, security, privacy, customer marketing, and other needs of end-users.

ZIFF DAVIS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Information on reportable segments and reconciliation to income from operations is as follows (in thousands):

The accounting policies of the reportable segments are the same as those described in Note 2 — Basis of Presentation and Summary of Significant Accounting Policies .

The Company evaluates performance of all of its reportable segments based on its ‘Income from operations’ and the CODM uses ‘Income from operations’ to assess performance, make operating decisions, and allocate resources, including employees, property, and financial or capital resources, for each reportable segment.

On a monthly basis, the CODM considers forecast-to-actual variances when making decisions about allocating capital and personnel-related resources to each reportable segment.

Segment results presented below are exclusive of inter-segment revenues and inter-segment expenses, which are immaterial.

The CODM does not use Balance Sheet information in connection with operating and investment decisions and as such that information is not presented.

The CODM does use capital expenditures by reportable segment in connection with operating and investment decisions.

Information on reportable segments revenues is as follows (in thousands):

Years Ended December 31,

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Revenue by reportable segment:

Digital Media $ 1,072,971 $ 1,079,172 $ 1,069,300

Cybersecurity and Martech 291,209 312,626 348,611

Elimination of inter-segment revenues (1)

( 152 ) ( 801 ) ( 1,189 )

Technology & Shopping $ 361,882 $ 330,557 $ 384,929

Gaming & Entertainment 180,276 168,821 166,325

Health & Wellness 362,408 361,923 335,883

Connectivity 213,620 211,518 191,254

Cybersecurity & Martech 283,502 291,209 312,606

Total segment revenues

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$ 1,401,688 $ 1,364,028 $ 1,390,997

Operating costs and expenses by reportable segment (3) :

Digital Media 931,980 880,240 851,807

Cybersecurity and Martech (4)

248,151 262,426 338,464

Elimination of inter-segment operating expenses ( 152 ) ( 801 ) ( 1,189 )

Total segment operating expenses 1,179,979 1,141,865 1,189,082

The descriptions of significant reportable segment expenses shown in the following tables are as follows:

• Salaries, benefits, and other employee expenses include employee compensation expenses for salaries, bonuses, benefits, payroll taxes, commissions, share-based compensation, severance costs, other related employee costs.

• Cloud computing, software, and other related expenses include costs associated with cloud computing, software purchases, web hosting, database hosting, and other computer related costs.

• Advertising and related marketing expenses include advertising relationships with an array of online service providers, marketing expenses, and other audience extension costs.

• Partner payments include expense associated with revenue sharing arrangements, content fees, and royalties.

• Professional and other-third party services include expenses for outside providers including freelancers, consultants, legal costs, and other professional services.

ZIFF DAVIS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Significant reportable segment expenses are set forth in the tables below (in thousands):

Year ended December 31, 2024

Technology & Shopping Gaming & Entertainment Health & Wellness Connectivity Cybersecurity & Martech Total operating costs and expenses

Salaries, benefits, and other employee expenses $ 139,293 $ 45,294 $ 115,509 $ 53,172 $ 77,518 $ 430,786

Cloud computing, software, and other related expenses 28,086 5,630 13,903 14,849 40,009 102,477

Advertising and marketing related expenses 51,418 12,226 39,199 2,898 21,799 127,540

Partner payments 7,063 27,262 38,736 932 21,063 95,056

Professional and other third-party services 20,455 5,908 8,730 14,356 17,228 66,677

Goodwill impairment 85,273 — — — — 85,273

Depreciation and amortization 83,424 10,733 52,766 31,882 33,025 211,830

Other 17,942 (1) 19,222 (2) 26,358 (3) 16,157 (4) 17,899 (5) 97,578

Total segment operating costs and expenses 432,954 126,275 295,201 134,246 228,541 1,217,217

Corporate (6)

51,438 50,191 60,300

Total operating costs and expenses $ 1,288,040

Operating income by reportable segment:

Digital Media operating income 140,991 198,932 217,493

Cybersecurity and Martech operating income (4)

43,058 50,200 10,147

Total segment operating income 184,049 249,132 227,640

ZIFF DAVIS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Year ended December 31, 2023

Technology & Shopping Gaming & Entertainment Health & Wellness Connectivity Cybersecurity & Martech Total operating costs and expenses

Salaries, benefits, and other employee expenses $ 121,721 $ 43,224 $ 109,401 $ 55,492 $ 75,340 $ 405,178

Cloud computing, software, and other related expenses 23,580 3,974 11,599 9,865 37,402 86,420

Advertising and marketing related expenses 55,185 9,468 42,477 3,296 24,189 134,615

Partner payments 7,721 26,637 33,842 730 19,120 88,050

Professional and other third-party services 15,025 3,629 10,604 13,199 18,211 60,668

Goodwill impairment 56,850 — — — — 56,850

Depreciation and amortization 83,271 10,368 59,870 31,793 52,618 237,920

Other 17,702 (1) 14,222 (2) 30,555 (3) 26,552 (4) 21,119 (5) 110,150

Total segment operating costs and expenses 381,055 111,522 298,348 140,927 247,999 1,179,851

Corporate (6)

( 51,438 ) ( 50,191 ) ( 60,300 )

Income from operations $ 132,611 $ 198,941 $ 167,340

(1) Inter-segment revenues in the Digital Media reportable segment were $ 0.2 million, $ 0.8 million, and $ 0.8 million, for the years ended December 31, 2023, 2022, and 2021, respectively.

Inter-segment revenues in the Cybersecurity and Martech reportable segment were $ 0.0 million , $ 0.0 million, and $ 0.4 million, for the years ended December 31, 2023, 2022, and 2021, respectively.

(2) Corporate includes costs associated with general and administrative and other expenses that are managed on a global basis and that are not directly attributable to any particular segment.

(3) Operating expenses for each segment include cost of sales and other operating expenses that are directly attributable to the segment, such as employee compensation expense, local sales and marketing expenses, engineering and network operations expense, depreciation and amortization and other administrative expenses.

For the twelve months ended December 31, 2023 and 2022, the Company had an impairment to goodwill within operating costs and expenses for Digital Media.

For the twelve months ended December 31, 2021, the Company had an impairment to goodwill within operating costs and expenses for Cybersecurity and Martech.

(4) For the year ended December 31, 2021, approximately $ 19.2 million of general and administrative costs were reflected as Corporate operating costs and expenses in the Company’s December 31, 2021 Form 10-K, however, should have been reflected as an operating cost for the Cybersecurity and Martech reportable segment.

The Company reclassified these costs in the table above as an operating cost for the Cybersecurity and Martech reportable segment and as a reduction of operating costs for Corporate, as well as the resulting impact in operating income (loss) for Cybersecurity and Martech and Corporate.

The reclassification has no impact on consolidated operating income (loss) from continuing operations for the year ended December 31, 2021.

The CODM does not use Balance Sheet information in connection with operating and investment decisions and as such that information is not presented.

The CODM does use capital expenditures by reportable segment in connection with operating and investment decisions.

Accordingly, the following segment information is presented for Digital Media and Cybersecurity and Martech.

Total operating costs and expenses $ 1,231,417

ZIFF DAVIS, INC.

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Year ended December 31, 2022

Technology & Shopping Gaming & Entertainment Health & Wellness Connectivity Cybersecurity & Martech Total operating costs and expenses

Salaries, benefits, and other employee expenses $ 131,808 $ 43,386 $ 99,808 $ 44,908 $ 77,909 $ 397,819

Cloud computing, software, and other related expenses 25,517 3,426 10,172 9,509 34,985 83,609

Advertising and marketing related expenses 61,380 10,626 39,366 2,790 27,187 141,349

Partner payments 9,572 29,965 32,175 — 23,207 94,919

Professional and other third-party services 11,953 1,964 9,990 10,575 22,404 56,886

Goodwill impairment 27,369 — — — — 27,369

Depreciation and amortization 93,187 10,045 55,981 25,445 48,714 233,372

Other 20,578 (1) 13,488 (2) 22,176 (3) 19,665 (4) 27,238 (5) 103,145

Total segment operating costs and expenses 381,364 112,900 269,668 112,892 261,644 1,138,468

Corporate (6)

Total operating costs and expenses $ 1,192,056

(1) Other Technology & Shopping operating costs and expenses consist primarily of credit card processing fees, campaign fulfillment costs, travel and entertainment costs, office expenses, bad debt expense, and certain allocated overhead expenses.

(2) Other Gaming & Entertainment operating costs and expenses consist primarily of credit card processing fees, inventory-related costs, campaign fulfillment costs, travel and entertainment costs, office expenses, bad debt expense, and certain allocated overhead expenses.

(3) Other Health & Wellness operating costs and expenses consist primarily of app-store fees, credit card processing fees, campaign fulfillment costs, travel and entertainment costs, office expenses, bad debt expense, and certain allocated overhead expenses.

(4) Other Connectivity operating costs and expenses consist primarily of inventory-related costs, credit card processing fees, inventory related costs, campaign fulfillment costs, travel and entertainment costs, office expenses, bad debt expense, and certain allocated overhead expenses.

(5) Other Cybersecurity & Martech operating costs and expenses consist primarily of credit card processing fees, telecommunication backbone costs, travel and entertainment costs, office expenses, bad debt expense, and certain allocated overhead expenses.

(6) Corporate includes costs associated with general, administrative, and other expenses (including some depreciation and amortization) that are managed on a global basis and that are not directly attributed to any particular segment.

ZIFF DAVIS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Information on (loss) income from operations is set forth in the table below (in thousands).

Years ended December 31,

2024 2023 2022

(Loss) income from operations by reportable segment:

Technology & Shopping $ ( 71,072 ) $ ( 50,498 ) $ 3,565

Gaming & Entertainment 54,001 57,299 53,425

Health & Wellness 67,207 63,575 66,215

Connectivity 79,374 70,591 78,362

Cybersecurity & Martech 54,961 43,210 50,962

Total segment income from operations

184,471 184,177 252,529

Corporate (1)

( 70,823 ) ( 51,566 ) ( 53,588 )

Income from operations $ 113,648 $ 132,611 $ 198,941

(1) Corporate includes costs associated with general, administrative, and other expenses that are managed on a global basis and that are not directly attributable to any particular segment.

Information on capital expenditures is set forth in the table below (in thousands).

Years ended December 31,

2024 2023 2022

Capital expenditures:

Digital Media $ 83,921 $ 85,049 $ 80,877

Cybersecurity and Martech 24,712 21,094 17,611

Technology & Shopping $ 13,609 $ 17,778 $ 25,088

Gaming & Entertainment 5,298 5,891 6,008

Health & Wellness 36,553 35,070 31,559

Connectivity 24,742 25,182 22,394

Cybersecurity & Martech 25,062 24,712 21,094

Total from reportable segments 105,264 108,633 106,143

Corporate 1,371 96 11

Capital expenditures of discontinued operations — — 15,252

Total capital expenditures $ 106,635 $ 108,729 $ 106,154

Depreciation and amortization:

Digital Media $ 184,321 $ 184,658 $ 193,661

Cybersecurity and Martech 52,618 48,714 55,344

Total from reportable segments 236,939 233,372 249,005

Corporate 27 28 288

Depreciation and amortization of

discontinued operations — — 9,010

Total depreciation and amortization $ 236,966 $ 233,400 $ 258,303

The Company maintains operations in the U.S., Canada, Ireland, the United Kingdom, India, and other countries.

2 unchanged sentences

Such information attributes revenues based on jurisdictions where revenues are reported (in thousands).

Year ended December 31,

Years ended December 31,

2024 2023 2022

12 unchanged sentences

Non-cash investing and financing activities were as follows (in thousands):

Year ended December 31,

Years ended December 31,

2024 2023 2022

9 unchanged sentences

$ — $ — $ 112,286

Debt principal settled in exchange for Consensus senior notes due 2028 $ — $ — $ 485,000

Conversion shares issued as extinguishment cost to redeem 3.25 % Convertible Notes

Increase in fair value of conversion feature on 3.625 % Convertible Notes

$ 4,001 $ — $ —

Reacquisition of 3.25 % Convertible Notes, net of tax

Excise tax on share repurchases

$ 1,099 $ — $ —

(1) Combines continuing and discontinued operations.

(1) During the year ended December 31, 2022, the Company disposed $ 160.1 million of its investment in Consensus in exchange for $ 112.3 million of debt and recorded $ 47.8 million of loss on investment, net.

Supplemental data (in thousands):

Year ended December 31,

Years ended December 31,

2024 2023 2022

2 unchanged sentences

Operating cash outflows related to lease liabilities were as follows (in thousands):

Year ended December 31,

Years ended December 31,

2024 2023 2022

Operating cash outflows related to lease liabilities $ 17,167 $ 23,230 $ 26,921

ZIFF DAVIS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Accumulated Other Comprehensive Income

3 unchanged sentences

$ 169 $ ( 57,391 ) ( 57,222 )

Other comprehensive loss before reclassifications

Other comprehensive income (loss) before reclassifications

272 ( 32,479 ) ( 32,207 )

Consensus separation — 4,056 4,056

Net current period other comprehensive loss

( 114 ) ( 2,302 ) ( 2,416 )

Balance as of December 31, 2022

$ 441 $ ( 85,814 ) $ ( 85,373 )

Other comprehensive income (loss) before reclassifications

Other comprehensive income before reclassifications

96 13,657 13,753

Consensus separation adjustment — 4,056 4,056

Net current period other comprehensive income (loss) 272 ( 28,423 ) ( 28,151 )

Balance as of December 31, 2023

$ 537 $ ( 72,157 ) $ ( 71,620 )

Other comprehensive income before reclassifications

96 13,657 13,753

Net current period other comprehensive income

Other comprehensive income (loss) before reclassifications

1,575 ( 12,426 ) ( 10,851 )

1 unchanged sentence

$ 2,112 $ ( 84,583 ) $ ( 82,471 )

The following table provides details about reclassifications out of accumulated other comprehensive loss for the years ended December 31, 2023, 2022, and 2021.

Details about Accumulated Other Comprehensive Loss components

Amount reclassified from Accumulated Other Comprehensive Loss

Affected line item in the Statements of Operations

For the year ending December 31,

2023 2022 2021

Unrealized loss on available-for-sale investments $ — $ — $ ( 151 ) Loss on investments, net

— — ( 151 ) Income before income taxes

Total reclassifications for the period $ — $ — $ ( 151 ) Net income

Related Party Transactions

As of December 31, 2023 and December 31, 2022, the Company held approximately 1.0 million and 1.1 million shares of the common stock of Consensus, respectively, representing approximately 5 % of the Consensus outstanding common stock at each period end.

The Company determined that Consensus was no longer a related party after September 30, 2022.

Related party transactions with Consensus through September 30, 2022 are included within the disclosures below.

In preparation for and in executing the Separation, the Company incurred transaction-related costs, some of which were reimbursed by Consensus, of approximately $ 23.3 million (excluding costs associated with the debt exchange noted below), before reimbursement by Consensus.

During the year ended December 31, 2021, Ziff Davis received or expected to receive approximately $ 11.7 million (excluding the reimbursement of a portion of the debt exchange noted below) from Consensus resulting in net transaction costs of $ 11.6 million.

These net transaction-related costs were recorded in ‘General, administrative, and other related costs’ component of ‘Income (loss) from discontinued operations, net of income taxes’ within the Consolidated Statement of Operations.

During the year ended December 31, 2021, Consensus also reimbursed Ziff Davis for certain costs associated with the debt exchange in connection with the Separation totaling $ 7.5 million, which was recorded as an offset to the loss on extinguishment of debt on the Consolidated Statement of Operations.

In addition, Consensus paid the Company approximately $ 8.5 million subsequent to the Separation due to excess cash held at the Separation date net of other related items pursuant to the Separation and Distribution Agreement.

There were no reclassifications out of accumulated other comprehensive loss for the years ended December 31, 2024, 2023, and 2022.

ZIFF DAVIS, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Related Party Transactions

Following the Separation (see Note 2 — Basis of Presentation and Summary of Significant Accounting Policies) , the Company retained an approximate 19.9 % interest in Consensus common stock.

Throughout the year ended December 31, 2022, the Company disposed of a significant portion of its investment in Consensus common stock resulting in Consensus no longer being a related party after September 30, 2022.

Related party transactions with Consensus through September 30, 2022 are discussed in Note 5 — Investments.

In connection with the Separation, Ziff Davis and Consensus entered into several agreements that govern the relationship of the parties following the Separation, including a separation and distribution agreement, a transition services agreement, a tax matters agreement, an employee matters agreement, an intellectual property license agreement, and a stockholder and registration rights agreement.

The transition services agreement governs services including certain information technology services, finance and accounting services, and human resource and employee benefit services.

The agreed-upon charges for such services are generally intended to allow the providing company to recover all costs and expenses of providing such services, and nearly all such services were terminated without extension twelve months after the Separation.

During the years ended December 31, 2022 and 2021, the Company recorded an offset to expense of approximately $ 1.2 million and $ 2.1 million, respectively, from Consensus related to the transition services agreement within ‘General, administrative, and other related costs’ within the Consolidated Statements of Operations.

The agreed-upon charges for such services were generally intended to allow the providing company to recover all costs and expenses of providing such services, and nearly all such services were terminated without extension twelve months after the Separation.

During the year ended December 31, 2022, the Company recorded an offset to expense of approximately $ 1.2 million from Consensus related to the transition services agreement within ‘General, administrative, and other related costs’ within the Consolidated Statements of Operations.

Further, the Company assigned its lease of office space in Los Angeles, California to Consensus.

Ziff Davis remained the lessee under this lease and its obligations remained in place through October 7, 2022, after which time Consensus took over the lease in full.

During the years ended December 31, 2022 and 2021, the Company recorded an offset to lease expense of approximately $ 1.5 million and $ 0.5 million, respectively, related to this lease, however, Consensus paid the landlord directly and not Ziff Davis.

Amounts due from Consensus as of December 31, 2021 were $ 9.3 million (comprised of $ 2.1 million related to services provided under the transition services agreement and $ 7.2 million related to reimbursement of certain transaction related costs and other reimbursements), and are included in within ‘Accounts receivable’ within the Consolidated Balance Sheets.

During the year ended December 31, 2022, the Company recorded an offset to lease expense of approximately $ 1.5 million related to this lease.

However, Consensus paid the landlord directly and not Ziff Davis.

OCV is considered a related party because it is an investment that is accounted for by the equity method.

6 unchanged sentences

The manager, OCV Management, LLC, and general partner of the OCV Fund are entities with respect to which Richard S.

Ressler, former Chairman of the Board of Directors (the “Board”) of the Company, is indirectly the majority equity holder.

Ressler, former Chairman of the Board of the Company, is indirectly the majority equity holder.

Ressler’s tenure with the Board ended as of May 10, 2022.

1 unchanged sentence

In addition, subject to the terms and conditions of the Fund’s limited partnership agreement, once the Company has received distributions equal to its invested capital, the OCV Fund’s general partner would be entitled to a carried interest equal to 20 %.

The OCV Fund has a six year investment period, subject to certain exceptions.

The OCV Fund has a six year investment period, during which any incremental investments can be made, subject to certain exceptions.

The commitment was approved by the Audit Committee of the Board in accordance with the Company’s related-party transaction approval policy.

1 unchanged sentence

In connection with the settlement of the litigation, among other terms, no further capital calls will be made in connection with the Company’s investment in the OCV Fund, nor will any further management fees be paid by the Company to the manager.

During the years ended December 31, 2022 and 2021, the Company recognized expense for management fees of $ 1.5 million and $ 3.0 million, net of tax benefit, respectively.

During the year ended 2021, the Company received capital call notices from the management of OCV Management, LLC for $ 22.2 million, inclusive of certain management fees, of which $ 22.2 million had been paid for the year ended December 31, 2021.

During the year ended December 31, 2021, the Company received a distribution from OCV of $ 15.3 million.

Subsequent Event

On February 5, 2024, the Company completed an acquisition of 100 % of the equity interest of TDS Gift Cards, a digital gifting and branded payments platform.

After adjustment for net working capital liabilities, the Company paid approximately $ 48 million in cash.

The acquisition will be accounted for as a business combination under ASC 805, Business Combinations .

The Company is in the process of finalizing the accounting for this transaction and will complete the preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed by the end of the first quarter of 2024.

During the year ended December 31, 2022, the Company recognized expense for management fees of $ 1.5 million, net of tax benefit.

Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data