What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-09 compared with 2024-11-08 · 398 added, 508 removed, 506 unchanged (64% of the section changed)

4 unchanged sentences

(Unaudited, in thousands except share and per share data)

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Cash and cash equivalents $ 431,007 $ 505,880

Short-term investments — 27,109

Accounts receivable, net of allowances of $ 7,501 and $ 8,148 , respectively

11 unchanged sentences

LIABILITIES AND STOCKHOLDERS’ EQUITY

Accounts payable $ 371,498 $ 123,256

Accrued employee related costs 33,829 50,068

Other accrued liabilities 36,557 43,612

Accounts payable and accrued expenses $ 463,518 $ 670,769

Income taxes payable, current 14,378 19,715

3 unchanged sentences

Long-term debt 864,829 864,282

Deferred income taxes 53,577 45,503

Income taxes payable, noncurrent — 8,486

Deferred revenue, noncurrent 5,645 5,504

Other long-term liabilities 74,908 82,721

Liability for uncertain tax positions 30,793 30,296

Deferred income taxes 44,473 46,018

Other noncurrent liabilities 43,996 47,705

TOTAL LIABILITIES 1,694,510 1,893,452

10 unchanged sentences

Authorized 95,000,000 ;

total issued and outstanding 42,740,848 and 46,078,464 shares at September 30, 2024 and December 31, 2023, respectively

total issued and outstanding 42,230,734 and 42,848,339 shares at March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital 485,008 491,891

8 unchanged sentences

(Unaudited, in thousands except share and per share data)

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

Three months ended March 31,

Total revenues $ 328,636 $ 314,485

4 unchanged sentences

General, administrative, and other related costs 46,910 49,510

Goodwill impairment on business 85,273 56,850 85,273 56,850

Depreciation and amortization 55,832 48,453

Total operating costs and expenses 293,506 278,624

(Loss) income from operations ( 29,304 ) ( 13,319 ) 35,126 51,891

Income from operations 35,130 35,861

Interest expense, net ( 6,131 ) ( 1,769 )

1 unchanged sentence

Loss on investments, net — ( 10,705 )

— ( 6,019 ) ( 7,654 ) ( 29,203 )

Other (loss) income, net

( 2,633 ) ( 3,571 ) 2,530 ( 5,982 )

(Loss) income before income tax expense and (loss) income from equity method investment

( 35,961 ) ( 25,726 ) 18,625 ( 1,074 )

Other loss, net ( 2,803 ) ( 104 )

Income before income tax expense and income (loss) from equity method investment 26,196 19,503

Income tax expense ( 8,587 ) ( 8,231 )

( 12,539 ) ( 5,335 ) ( 27,760 ) ( 11,180 )

(Loss) income from equity method investment, net of tax

( 77 ) 90 8,095 ( 9,665 )

$ ( 48,577 ) $ ( 30,971 ) $ ( 1,040 ) $ ( 21,919 )

Net loss per common share:

Income (loss) from equity method investment, net of tax 6,630 ( 645 )

Net income $ 24,239 $ 10,627

Net income per common share:

Basic $ 0.57 $ 0.23

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in thousands)

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

$ ( 48,577 ) $ ( 30,971 ) $ ( 1,040 ) $ ( 21,919 )

Three months ended March 31,

Net income $ 24,239 $ 10,627

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustment 11,411 ( 6,530 )

Change in fair value on available-for-sale investments, net of tax expense of $ 118 and $ 93 for the three months ended September 30, 2024 and 2023, respectively, and tax expense of $ 200 and tax benefit of $ 37 for the nine months ended September 30, 2024 and 2023, respectively

352 309 630 ( 80 )

Change in fair value on available-for-sale investments, net of tax expense of $ 88 and tax benefit of $ 19 for the three months ended March 31, 2025 and 2024, respectively

Other comprehensive income (loss), net of tax

11,691 ( 6,593 )

Comprehensive (loss) income

Comprehensive income

$ 35,930 $ 4,034

4 unchanged sentences

(Unaudited, in thousands)

Nine months ended September 30,

Three months ended March 31,

Cash flows from operating activities:

Net loss $ ( 1,040 ) $ ( 21,919 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Net income $ 24,239 $ 10,627

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 55,832 48,453

2 unchanged sentences

Provision for credit losses on accounts receivable 160 50

Deferred income taxes ( 14,575 ) ( 25,658 )

Deferred income taxes, net 548 ( 2,709 )

Loss on sale of businesses

Goodwill impairment on business 85,273 56,850

Changes in fair value of contingent consideration ( 1,803 ) —

(Income) loss from equity method investments, net

15 unchanged sentences

Acquisition of businesses, net of cash received ( 39,198 ) ( 44,524 )

Purchases of equity method investment — ( 11,790 )

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

Proceeds from sale of businesses, net of cash divested — 1,238

2 unchanged sentences

Cash flows from financing activities:

Payment of debt ( 134,989 ) —

Repurchase of common stock ( 34,900 ) ( 3,923 )

Issuance of common stock under employee stock purchase plan 4,525 4,725

Deferred payments for acquisitions — ( 2,418 )

10 unchanged sentences

(Unaudited, in thousands, except share amounts)

Three months ended September 30, 2024

Common stock Additional paid-in

Retained Accumulated other

Stockholders’

Shares Amount capital earnings comprehensive loss

Balance, July 1, 2024 44,740,322 $ 447 $ 476,232 $ 1,471,543 $ ( 78,335 ) $ 1,869,887

— — — ( 48,577 ) — ( 48,577 )

Other comprehensive income, net of tax expense of $( 118 )

— — — — 14,866 14,866

Issuance of restricted stock, net 526 — ( 198 ) 88 — ( 110 )

Issuance of shares under employee stock purchase plan — — — — — —

Repurchase and retirement of common stock ( 2,000,000 ) ( 20 ) ( 9,250 ) ( 87,650 ) — ( 96,920 )

Share-based compensation — — 10,161 — — 10,161

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 — — 325 ( 321 ) — 4

Balance, September 30, 2024 42,740,848 $ 427 $ 480,271 $ 1,335,083 $ ( 63,469 ) $ 1,752,312

Three months ended September 30, 2023

Common stock Additional paid-in

Retained Accumulated other

Stockholders’

Shares Amount capital earnings comprehensive loss

Balance, July 1, 2023 46,402,143 $ 464 $ 448,920 $ 1,492,879 $ ( 79,581 ) $ 1,862,682

Net loss — — — ( 30,971 ) — ( 30,971 )

Other comprehensive loss, inclusive of tax expense of $( 93 )

— — — — ( 6,532 ) ( 6,532 )

Issuance of restricted stock, net 2,041 — ( 265 ) 35 — ( 230 )

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

Repurchase and retirement of common stock ( 605,428 ) ( 6 ) ( 6,035 ) ( 34,978 ) — ( 41,019 )

Share-based compensation — — 6,774 — — 6,774

Other, net — — ( 2 ) 14 — 12

Balance, September 30, 2023 45,984,858 $ 460 $ 462,812 $ 1,426,979 $ ( 86,113 ) $ 1,804,138

ZIFF DAVIS, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited, in thousands, except share amounts)

Nine months ended September 30, 2024

Three months ended March 31, 2025

Common stock Additional paid-in

3 unchanged sentences

Balance, January 1, 2025 42,848,339 $ 428 $ 491,891 $ 1,401,034 $ ( 82,471 ) $ 1,810,882

Net loss — — — ( 1,040 ) — ( 1,040 )

— — — 24,239 — 24,239

Other comprehensive income, net of tax expense of $ 88

1 unchanged sentence

Issuance of restricted stock, net 132,395 1 ( 7,832 ) 3,528 — ( 4,303 )

Issuance of shares under employee stock purchase plan 92,589 1 4,524 — — 4,525

Repurchase and retirement of common stock ( 750,000 ) ( 7 ) ( 8,693 ) ( 22,203 ) — ( 30,903 )

Share-based compensation — — 9,751 — — 9,751

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 — — ( 109 ) 117 — 8

Balance, September 30, 2024 42,740,848 $ 427 $ 480,271 $ 1,335,083 $ ( 63,469 ) $ 1,752,312

Nine months ended September 30, 2023

Balance, March 31, 2025 42,230,734 $ 422 $ 485,008 $ 1,406,715 $ ( 70,780 ) $ 1,821,365

Three months ended March 31, 2024

Common stock Additional paid-in

3 unchanged sentences

Balance, January 1, 2024 46,078,464 $ 461 $ 472,201 $ 1,491,956 $ ( 71,620 ) $ 1,892,998

Net loss — — — ( 21,919 ) — ( 21,919 )

Net income — — — 10,627 — 10,627

Other comprehensive loss, inclusive of tax benefit of $ 19

1 unchanged sentence

Issuance of restricted stock, net 56,244 — ( 5,152 ) 1,229 — ( 3,923 )

Issuance of shares under employee stock purchase plan 87,098 1 4,724 — — 4,725

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 )

Share-based compensation — — 8,872 — — 8,872

Other, net — — 5 26 — 31

Balance, September 30, 2023 45,984,858 $ 460 $ 462,812 $ 1,426,979 $ ( 86,113 ) $ 1,804,138

Balance, March 31, 2024 46,134,708 $ 461 $ 475,926 $ 1,503,838 $ ( 78,213 ) $ 1,902,012

See Notes to Condensed Consolidated Financial Statements (Unaudited)

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Description of Business

Ziff Davis is a vertically focused digital media and internet company whose portfolio includes brands in technology, shopping, gaming and entertainment, connectivity, health and wellness, cybersecurity, and martech.

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

Our Cybersecurity and Martech business provides cloud-based subscription and license services to consumers and businesses including cybersecurity, privacy, and marketing technology.

Ziff Davis 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.

Reclassifications

Certain prior year reported amounts have been reclassified to conform to the 2025 presentation.

For the three months ended March 31, 2024, the Company reclassified depreciation and amortization of $ 1.2 million and $ 47.3 million from ‘Direct costs’ and ‘General, administrative, and other related costs’, respectively, to ‘Depreciation and amortization’ to conform with current period presentation.

Significant Accounting Policies

The significant accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements included in its Form 10-K for the year ended December 31, 2023.

Direct costs - 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, processing fees, and depreciation and amortization expense.

For the three and nine months ended September 30, 2024, there have been no new or material changes to the significant accounting policies discussed in the Company’s Form 10-K for the fiscal year ended December 31, 2023.

Recent Accounting Pronouncements

Recently issued applicable accounting pronouncements not yet adopted

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

This update provides for optional financial reporting alternatives to reduce costs and complexities associated with accounting for contracts, hedging relationships, and other transactions affected by reference rate reform.

This update applies only to contracts, hedging relationships, and other transactions that reference London Interbank Offer Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform.

The accommodations were available for all entities through December 31, 2022, with early adoption permitted.

This update was later amended by ASU 2022-06.

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 .

This update defers the expiration date of Accounting Standards Codification (“ASC”) Topic 848 from December 31, 2022 to December 31, 2024.

We do not anticipate that adoption of this standard will have a material impact 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

The significant accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2024.

For the three months ended March 31, 2025, there have been no new or material changes to the significant accounting policies discussed in the Company’s Form 10-K for the fiscal year ended December 31, 2024.

Accounts Receivable, net

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

March 31, 2025 December 31, 2024

Settlement receivables, net $ 208,847 $ 296,553

Trade receivables, net 309,016 363,670

Accounts receivable, net $ 517,863 $ 660,223

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.

ZIFF DAVIS, INC.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

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.

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

Improvements to Reportable Segment Disclosures , which provides for enhanced disclosures about significant segment expenses.

This update enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure requirements for entities with a single reportable segment, and contains other disclosure requirements.

The purpose of this update is to enable investors to better understand an entity’s overall performance and assess potential future cash flows.

The update is required to be applied retrospectively to prior periods presented, based on the significant segment expense categories identified and disclosed in the period of adoption.

The amendments in this update are required to be adopted for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

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

We are currently evaluating the impact of adoption of this update will have on our consolidated financial statements and related disclosures and expect to adopt them for the year ended December 31, 2024.

Accounts Payable and Accrued Expenses

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

March 31, 2025 December 31, 2024

Accounts payable $ 140,909 $ 164,352

Settlement payables, net 252,706 408,747

Accrued employee related costs 27,356 55,800

Other accrued liabilities 42,547 41,870

Total Accounts payable and accrued expenses $ 463,518 $ 670,769

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.

Recent Accounting Pronouncements

Recently issued applicable accounting pronouncements not yet adopted

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

Improvements to Income Tax Disclosures.

This update also requires that entities disclose on an annual basis information about the amount of income taxes paid disaggregated by federal, state, and foreign taxes and the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid is equal to or greater than a quantitative threshold.

The amendments in this update are required to be adopted for fiscal years beginning after December 15, 2024.

The amendments in the update require public business entities on an annual basis to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold of equal to or greater than 5% of the amount computed by multiplying pretax income by statutory income tax rate.

The amendments also require that entities disclose on an annual basis information about the amount of income taxes paid disaggregated by federal, state, and foreign taxes and the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid is equal to or greater than 5% of total income taxes paid.

The amendments eliminate some of the previously required disclosures for all entities relating to estimates of the change in unrecognized tax benefits reasonably possible within twelve months.

The amendments in this update are effective on a prospective basis for annual periods beginning after December 15, 2024.

Early adoption is permitted.

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

Digital Media

Digital Media revenues are earned primarily from the delivery of advertising and performance marketing 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.

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.

In January 2025, the FASB issued ASU 2025-01, Income Statements - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date .

This update, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

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

Revenues from the delivery of advertising services are 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 revenues from marketing, performance marketing, production services, and the management of client gift card programs.

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 monetize 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.

ZIFF DAVIS, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

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.

The Company also records revenue on a net basis with respect to the transfer of functional intellectual property through third-party gaming platforms and with respect to revenue earned from servicing client gift card programs.

Subscription and Licensing

Revenues from subscriptions are 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.

ZIFF DAVIS, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Digital Media subscription and licensing revenues also 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.

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 are available during the term of the support period.

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

• 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.

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 consist of subscription and licensing revenues which primarily 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.

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.

The Company records revenue on a net basis with respect to revenue earned from servicing the client gift card programs.

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.

ZIFF DAVIS, INC.

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Revenues from external customers classified by revenue source are as follows (in thousands):

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

Digital Media

Three months ended March 31,

Technology & Shopping

Advertising and performance marketing $ 79,476 $ 65,907

$ 193,626 $ 183,008 $ 520,063 $ 514,173

Subscription and licensing 2,178 1,695

77,450 71,858 223,681 209,167

Other 36 1,665

Total Digital Media revenues $ 283,567 $ 267,951 $ 774,436 $ 755,032

Cybersecurity and Martech

Total Technology & Shopping revenues $ 81,690 $ 69,267

Gaming & Entertainment

Advertising and performance marketing $ 24,371 $ 22,755

Subscription and licensing 13,646 13,885

$ 70,039 $ 73,051 $ 214,475 $ 219,263

Total Cybersecurity and Martech revenues $ 70,039 $ 73,051 $ 214,475 $ 219,263

Elimination of inter-segment revenues ( 26 ) ( 17 ) ( 46 ) ( 152 )

Total Gaming & Entertainment revenues $ 38,026 $ 36,640

Health & Wellness

Advertising and performance marketing $ 68,925 $ 64,447

Subscription and licensing 13,128 11,584

Other 3,733 3,947

Total Health & Wellness revenues $ 85,786 $ 79,978

Advertising and performance marketing $ 2,468 $ 2,969

Subscription and licensing 49,662 46,303

Other 3,690 3,876

Total Connectivity revenues $ 55,820 $ 53,148

Cybersecurity & Martech

Subscription and licensing $ 67,314 $ 75,452

Total Cybersecurity & Martech revenues $ 67,314 $ 75,452

Corporate $ — $ —

Total Revenues $ 328,636 $ 314,485

The Company recorded $ 33.9 million and $ 27.8 million of revenue for the three months ended September 30, 2024 and 2023, respectively, and $ 166.3 million and $ 140.9 million of revenue for the nine months ended September 30, 2024 and 2023, respectively, which was previously included in the deferred revenue balance as of the beginning of each respective year.

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

The Company recorded $ 84.1 million and $ 74.1 million of revenue for the three months ended March 31, 2025 and 2024, respectively, which was previously included in the deferred revenue balance as of the beginning of each respective year.

Performance Obligations

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 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.

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.

The Company determines the transaction price based on the amount to which the Company expects to be entitled in exchange for services provided.

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.

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

The time between invoicing and when payment is due is generally 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.

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, the performance obligations are satisfied at a point in time.

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

ZIFF DAVIS, INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

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 is recognized over the contract period when any of the following materially distinct performance obligations are satisfied:

transaction price.

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

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.

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, or when functional intellectual property is delivered 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.

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

As of September 30, 2024, the aggregate amount of transaction price that is allocated to future performance obligations was approximately $ 80.3 million and is expected to be recognized as follows:

As of March 31, 2025, the aggregate amount of transaction price that is allocated to future performance obligations was approximately $ 84.7 million and is expected to be recognized as follows:

51 % by December 31, 2025, 34 % by December 31, 2026, and 15 % thereafter.

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.

Business Acquisitions

The Company uses acquisitions as a strategy to grow its customer base by increasing its presence in new and existing markets, expanding and diversifying its service offerings, enhancing its technology, and acquiring skilled personnel.

For the three and nine months ended September 30, 2024, the Company recorded $ 20.7 million and $ 40.0 million, respectively, of incremental revenue from the businesses acquired during the nine months ended September 30, 2024.

The Company uses acquisitions as a strategy to grow its customer base by increasing its presence in new and existing markets, expand and diversify its service offerings, enhance its technology, and acquire skilled personnel.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

2025 Acquisitions

The Company completed two immaterial acquisitions during the three months ended March 31, 2025, paying the purchase price in cash in each transaction.

Total consideration for all businesses acquired in 2025 was $ 41.3 million, or $ 40.0 million, net of cash acquired.

Goodwill recognized associated with these acquisitions during the three months ended March 31, 2025 was $ 12.7 million, of which is $ 11.7 million is expected to be deductible for income tax purposes.

Approximately $ 19.1 million of definite-lived intangibles were recorded in connection with the acquisition during the three months ended March 31, 2025, including $ 9.3 million of Customer relationships, net, $ 5.1 million of Trade names and trademarks, net, and $ 4.7 million of Other purchased intangibles, net.

The initial accounting for 2025 acquisitions is incomplete due to the timing of available information and is subject to change.

As of March 31, 2025, 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 Condensed Consolidated Statement of Operations reflects the results of operations of the 2025 acquisitions since the date of each respective acquisition.

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

2024 Acquisitions

The Company completed the following acquisitions during the nine months ended September 30, 2024, paying the purchase price in cash in each transaction:

(a) a purchase of 100 % of the equity interest in TDS Gift Cards (“TDS”), acquired on February 5, 2024, a digital gifting and branded payments platform, which is reported within our Digital Media segment;

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

(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 Digital Media segment;

and (c) one other immaterial Digital Media acquisition.

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 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 $ 358.2 million, or $ 212.3 million, net of cash acquired.

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

and two other immaterial acquisitions.

The acquisition of TDS expanded 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 has allowed us to reach a wider audience that is attractive to advertisers in the technology space.

Total consideration for all business acquired in 2024 was $ 364.9 million, or $ 218.9 million, net of cash acquired.

ZIFF DAVIS, INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

The following table summarizes the allocation of the preliminary purchase consideration for the acquisition of TDS and CNET as of September 30, 2024 (in thousands):

The following table summarizes the fair value amounts recognized for the assets acquired and liabilities assumed for our 2024 acquisitions (in thousands):

Assets and Liabilities

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Deferred tax liability, noncurrent

Deferred revenue, noncurrent

Other noncurrent liabilities

$ 187,588 $ 154,248

(1) During the three months ended September 30, 2024, we recorded a measurement period adjustment increasing goodwill by $ 0.3 million with a corresponding adjustment to current assets.

(2) The fair value of the assets acquired includes accounts receivable of $ 170.7 million for TDS and $ 21.2 million related to CNET, of which none is expected to be uncollectible.

None of the goodwill recognized is expected to be deductible for income tax purposes.

(3) Deferred tax asset balance for CNET is presented within ‘Deferred income taxes’ on the Condensed Consolidated Balance Sheets.

The preliminary amounts assigned to intangible assets by type for all acquisitions during the nine months ended September 30, 2024 are summarized in the table below (in thousands):

Gross Carrying Value Weighted Average Estimated Life

Customer relationships $ 152,595 10 years

Trade names and trademarks 27,027 9 years

Other purchased intangibles 46,703 5 years

Total gross carrying value $ 226,325

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

The Company has recorded provisional amounts for certain intangible assets as of September 30, 2024.

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

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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Three months ended September 30, Nine months ended September 30,

(in thousands, except per share data)

2024 2023 2024 2023

(unaudited) (unaudited) (unaudited) (unaudited)

Revenues $ 370,719 $ 378,343 $ 1,050,666 $ 1,075,400

Net loss $ ( 51,585 ) $ ( 34,772 ) $ ( 15,451 ) $ ( 46,950 )

Loss per common share - Basic $ ( 1.17 ) $ ( 0.75 ) $ ( 0.34 ) $ ( 1.01 )

Loss per common share - Diluted $ ( 1.17 ) $ ( 0.75 ) $ ( 0.34 ) $ ( 1.01 )

2023 Acquisitions

The Company completed two immaterial Digital Media acquisitions during the nine months ended September 30, 2023, paying the purchase price in cash in each transaction.

(1) The fair value of the assets acquired includes accounts receivable of $ 170.7 million (including Settlement receivables, net of $ 166.8 million) related to TDS and $ 16.2 million related to CNET.

(2) During the three months ended March 31, 2025, we recorded a measurement period adjustment of $( 1.2 ) million to Customer relationships, $ 0.7 million to Other purchased intangibles assets, $ 0.6 million to Accounts receivable and other current assets, $ 0.2 million to Accounts payable and other current liabilities, with corresponding adjustments to Goodwill.

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

Goodwill recognized associated with these acquisitions during the nine months ended September 30, 2023 was $ 6.3 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 these acquisitions during the nine months ended September 30, 2023.

Investments consist of equity and debt securities.

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(“Consensus”).

During the three and nine months ended September 30, 2023, the Company sold zero and 52,393 shares, respectively, of common stock of Consensus in the open market.

As of December 31, 2023, the Company held approximately 1.0 million shares of the common stock of Consensus with the carrying value of $ 27.1 million, which was included in ‘Short-term investments’ in the Condensed Consolidated Balance Sheets.

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

As of December 31, 2024, the Company did not hold any shares of the common stock of Consensus.

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

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

For the three months ended September 30, 2024 and 2023, losses of zero and $ 6.0 million, respectively, were recorded in the Condensed Consolidated Statement of Operations.

For the nine months ended September 30, 2024 and 2023, losses of $ 7.7 million and $ 29.2 million, respectively, were recorded in the Condensed Consolidated Statement of Operations.

For the three months ended March 31, 2024, losses of $ 10.7 million were recorded in the Condensed Consolidated Statement 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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The Company accounts for its investment in Xyla as an equity investment without a readily determinable fair value measured under the measurement alternative in accordance with ASC Topic 321, Investments — Equity Securities .

As of each September 30, 2024 and December 31, 2023, the carrying value of the investment in Xyla was $ 25.3 million, including transaction costs, and is included in ‘Long-term investments’ in the Condensed Consolidated Balance Sheets.

As of March 31, 2025 and December 31, 2024, the investment in Xyla had a carrying value of $ 25.3 million, including transaction costs, and is included in ‘Long-term investments’ in the Condensed Consolidated Balance Sheets.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Investment in corporate debt security

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The investment was initially measured at its transaction price and subsequently remeasured at fair value, with unrealized gains and losses reported as a component of other comprehensive income.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

As of September 30, 2024, both the carrying value and the maximum exposure of the Company’s investment in corporate debt securities was approximately $ 16.5 million, with a contractual maturity date that was more than one year but less than five years .

As of March 31, 2025, both the carrying value and the maximum exposure of the Company’s investment in corporate debt securities was approximately $ 18.1 million, with a contractual maturity date that was more than one year but less than five years .

As of December 31, 2024, both the carrying value and the maximum exposure of the Company’s investment in corporate debt securities was approximately $ 17.8 million, with a contractual maturity date that was more than one year but less than five years .

Cumulative gross unrealized gains on investment in corporate debt securities as of September 30, 2024 and December 31, 2023 were approximately $ 1.5 million and $ 0.7 million, respectively.

There were no investments in an unrealized loss position as of September 30, 2024 and December 31, 2023.

During the three and nine months ended September 30, 2024 and 2023, the Company did not recognize any other-than-temporary impairment losses on its debt securities.

Cumulative gross unrealized gains on investment in corporate debt securities as of March 31, 2025 and December 31, 2024 were approximately $ 3.2 million and $ 2.8 million, respectively.

There were no investments in an unrealized loss position as of March 31, 2025 and December 31, 2024.

During the three months ended March 31, 2025 and 2024, the Company did not recognize any other-than-temporary impairment losses on its debt securities.

Equity method investment

On September 25, 2017, the Company entered into a commitment to invest in OCV Fund I, LP (the “OCV Fund”).

The Company recognizes its equity in the net earnings or losses relating to the investment in the OCV Fund on a one-quarter lag due to the timing and availability of financial information from the OCV Fund.

On September 25, 2017, the Company entered into a commitment to invest in the OCV Fund I, LP (the “OCV Fund”).

The Company recognizes its equity in the net earnings or losses relating to the investment in OCV Fund on a one-quarter lag due to the timing and availability of financial information from OCV Fund.

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 three months ended September 30, 2024 and 2023, the Company recognized (loss) income from the equity method investment of $( 0.1 ) million and $ 0.1 million, net of tax benefit (expense), respectively.

During the nine months ended September 30, 2024 and 2023, the Company recognized income (loss) from the equity method investment of $ 8.1 million and $( 9.7 ) million, net of tax (expense) benefit, respectively.

The income (loss) in the periods presented were primarily the result of gains or losses in the underlying investments.

As of September 30, 2024, both the carrying value and the maximum exposure of the Company’s equity method investment was approximately $ 110.9 million.

During the three months ended March 31, 2025 and 2024, the Company recognized income (loss) from the equity method investment of $ 6.6 million and $( 0.6 ) million, net of tax expense (benefit), respectively.

The income (loss) in the periods presented were primarily the result of gains and losses in the underlying investments.

As of March 31, 2025, both the carrying value and the maximum exposure of the Company’s equity method investment was approximately $ 123.6 million.

As of December 31, 2024, both the carrying value and the maximum exposure of the Company’s equity method investment was approximately $ 115.0 million.

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

These equity securities are included within ‘Long-term investments’ in the Condensed 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 future capital.

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.

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§ Level 3 – Unobservable inputs which are supported by little or no market activity.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

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

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

On May 22, 2024, the Company sold its remaining investment in Consensus common stock (see Note 4 - Investments ).

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

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.

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

During the second quarter of 2024, the Company sold its remaining investments in Consensus common stock (see Note 4 - Investments ).

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

The investment in corporate debt securities is classified as available-for-sale and is initially measured at its transaction price.

The fair value of the corporate debt securities is determined primarily based on estimates and assumptions, including Level 3 inputs.

As of September 30, 2024 and December 31, 2023, the fair value was determined based upon various probability-weighted scenarios which included discount rate assumptions between 13 % and 15 %, depending on the probability scenario.

In addition, the determination of fair value included a conversion timeframe of approximately one to two years , depending on the probability scenario, as of September 30, 2024 and as of December 31, 2023.

As of March 31, 2025 and December 31, 2024, 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 six months to two years , depending on the probability scenario, as of March 31, 2025 and as of December 31, 2024.

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 supported by market activity.

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Significant increases or decreases in any of the inputs in isolation could result in a significantly lower or higher fair value measurement.

As of September 30, 2024 and December 31, 2023, the contingent consideration was determined using a 100% probability of payout at the maximum amount, without any other estimates applied.

As of March 31, 2025 and December 31, 2024, the contingent consideration was determined using a 100% probability of payout at the maximum amount, without any other estimates applied.

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):

September 30, 2024 Level 1 Level 2 Level 3 Fair Value Carrying Value

March 31, 2025 Level 1 Level 2 Level 3 Fair Value Carrying Value

Cash equivalents:

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Total liabilities measured at fair value $ — $ — $ 1,031 $ 1,031 $ 1,031

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

December 31, 2024 Level 1 Level 2 Level 3 Fair Value Carrying Value

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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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At the end of each reporting period, management reviews the inputs to the fair value measurements of financial and non-financial assets and liabilities to determine when transfers between levels are deemed to have occurred.

For the three and nine months ended September 30, 2024 and 2023, there were no transfers that occurred between levels.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

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

Nine months ended September 30,

For the three months ended March 31, 2025 and 2024, there were no transfers that occurred between levels.

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):

Three months ended March 31,

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

Balance as of January 1 $ 2,834 $ 17,788 $ 2,834 $ 15,699

Fair value at date of acquisition — — 2,834 —

Fair value adjustments (1)

( 1,803 ) 368 — ( 82 )

Balance as of September 30 $ 2,834 $ 16,529 $ 3,389 $ 15,469

(1) The fair value adjustments to the corporate debt securities in the table above were recorded in ‘Change in fair value on available-for-sale investments, net’ in the Condensed Consolidated Statements of Comprehensive (Loss) Income during the three and nine months ended September 30, 2024 and 2023.

Balance as of March 31 $ 1,031 $ 18,156 $ 2,834 $ 15,617

(1) The fair value adjustments to the contingent consideration arrangements in the table above were recorded within ‘General, administrative, and other related costs’ in the Condensed Consolidated Statements of Operations during the three months ended March 31, 2025.

The fair value adjustments to the corporate debt securities in the table above were recorded in ‘Change in fair value on available-for-sale investments, net’ in the Condensed Consolidated Statements of Comprehensive Income (Loss) during the three months ended March 31, 2025 and 2024.

Nonrecurring Fair Value Measurements

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

See Note 7 - Goodwill and Intangible Assets for further information on goodwill impairment charges recorded during the three and nine months ended September 30, 2024 and 2023.

Other Fair Value Disclosures

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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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Carrying Value Fair Value Carrying Value Fair Value

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$ 259,202 $ 244,727 $ 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 7 — Debt, and paid an aggregate of approximately $ 135.0 million in cash.

Refer to Note 7 — Debt for additional information.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Goodwill and Intangible Assets

The changes in carrying amounts of goodwill for the nine months ended September 30, 2024 are as follows (in thousands):

Digital Media Cybersecurity and Martech Consolidated

The changes in carrying amounts of goodwill for the three months ended March 31, 2025 are as follows (in thousands):

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

Balance as of January 1, 2025

$ 322,057 $ 68,301 $ 403,056 $ 256,942 $ 529,902 $ 1,580,258

Goodwill acquired (1)

Goodwill acquired (Note 3)

— 11,743 945 — — 12,688

Goodwill removed due to sale of businesses (2)

Purchase accounting adjustments (1)

( 244 ) 48 — — ( 115 ) ( 311 )

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

Foreign exchange translation ( 6 ) 260 415 1,491 3,810 5,970

Balance as of September 30, 2024 $ 1,041,338 $ 531,516 $ 1,572,854

(1) Goodwill recognized in connection with the acquisitions during the nine months ended September 30, 2024 (see Note 3 — Business Acquisitions ), which is not expected to be deductible for income tax purposes .

(2) During the nine months ended September 30, 2024, in a cash transaction, the Company sold an international business at Digital Media within its shopping vertical, which resulted in $ 4.0 million of goodwill being removed in connection with this sale.

Goodwill as of September 30, 2024 and December 31, 2023 reflects accumulated impairment losses of $ 169.5 million and $ 84.2 million, respectively, in the Digital Media reportable segment.

During the three and nine months ended September 30, 2024, the Company reassessed the fair value of certain reporting units within the Digital Media and Cybersecurity and Martech reportable segments as a result of a sustained decline in the Company’s stock price, and forecasted reductions in revenue or 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 Digital Media 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 three and nine months ended September 30, 2024.

During the three and nine months ended September 30, 2023, the Company reassessed the fair value of certain reporting units within the Digital Media 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 one reporting unit exceeded its fair value, and the Company recorded an impairment of approximately $ 56.9 million during the three and nine months ended September 30, 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.

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 based on public and private market information.

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.

The expected cash flows used in the discounted cash flow analyses were based on the most recent forecast for the reporting unit.

For years beyond the forecast period, the estimates were based, in part, on forecasted growth rates.

The discount rate the Company used represents the estimated weighted average cost of capital, which reflects the overall level of inherent risk involved in its reporting unit operations and the rate of return a market participant would expect to earn.

Determining fair value using a market approach considers multiples of financial metrics based on trading multiples of a selected peer group of companies.

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.

Following the impairments at two reporting units during the three and nine months ended September 30, 2024, there was no excess of fair value over the carrying value at those reporting units.

So any further decrease in estimated fair value of these two reporting units will result in an additional impairment charge to goodwill.

Further, as of September 30, 2024, there was one additional reporting unit within the Digital Media reportable segment that may be at risk of impairment.

In total, goodwill for these three reporting units was $ 498.4 million as of September 30, 2024.

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.

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Balance as of March 31, 2025 $ 321,807 $ 80,352 $ 404,416 $ 258,433 $ 533,597 $ 1,598,605

(1) Purchase accounting adjustments relate to measurement period adjustments to goodwill in connection with prior business acquisitions (see Note 3 — Business Acquisitions ).

Goodwill as of each of March 31, 2025 and December 31, 2024 reflects accumulated impairment losses of $ 169.5 million in the Technology & Shopping reportable segment.

Intangible Assets Subject to Amortization

As of September 30, 2024, intangible assets subject to amortization relate primarily to the following (in thousands):

As of March 31, 2025, intangible assets subject to amortization relate primarily to the following (in thousands):

Cost Accumulated

13 unchanged sentences

Total $ 1,632,831 $ 1,207,082 $ 425,749

Amortization expense, included in ‘General, administrative, and other related costs’ in our Condensed Consolidated Statements of Operations, was approximately $ 28.5 million and $ 33.0 million for the three months ended September 30, 2024 and 2023, respectively, and $ 82.5 million and $ 100.0 million for the nine months ended September 30, 2024 and 2023, respectively.

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Amortization expense, included in ‘Depreciation and amortization’ in our Condensed Consolidated Statements of Operations, was approximately $ 28.8 million and $ 26.3 million for the three months ended March 31, 2025 and 2024, respectively.

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

4.625 % Senior Notes

3 unchanged sentences

3.625 % Convertible Notes

263,147 263,147

Total Notes 872,294 872,294

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Total long-term debt $ 864,829 $ 864,282

(1) Includes $ 0.7 million and $ 0.8 million of carrying amount of deferred issuance costs on the 4.625 % Senior Notes as of September 30, 2024 and December 31, 2023, respectively, $ 1.0 million and $ 5.5 million of carrying amount of deferred issuance costs on the 1.75 % Convertible Notes as of September 30, 2024 and December 31, 2023, respectively, and $ 0.8 million of carrying amount of deferred issuance costs on the 3.625 % Convertible Notes as of September 30, 2024.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

As of September 30, 2024, $ 149.1 million of principal of 1.75 % Convertible Notes will mature in 2026, $ 263.1 million of principal of 3.625 % Convertible Notes will mature in 2028, and $ 460.0 million of principal of 4.625 % Senior Notes will mature in 2030.

(1) Includes $ 0.7 million and $ 0.7 million of carrying amount of deferred issuance costs on the 4.625 % Senior Notes as of March 31, 2025 and December 31, 2024, respectively, $ 0.8 million and $ 0.9 million of carrying amount of deferred issuance costs on the 1.75 % Convertible Notes as of March 31, 2025 and December 31, 2024, respectively, and $ 0.7 million and $ 0.7 million of carrying amount of deferred issuance costs on the 3.625 % Convertible Notes as of March 31, 2025 and December 31, 2024, respectively.

As of March 31, 2025, the $ 149.1 million of principal of the 1.75 % Convertible Notes will mature in 2026, $ 263.1 million of principal of the 3.625 % Convertible Notes will mature in 2028, and $ 460.0 million of principal of the 4.625 % Senior Notes will mature in 2030.

4.625 % Senior Notes

On October 7, 2020, the Company completed the issuance and sale of $ 750.0 million aggregate principal amount of its 4.625 % senior notes due 2030 (the “ 4.625 % Senior Notes”) in a private placement offering exempt from the registration requirements of the Securities Act of 1933, as amended.

The Company received proceeds of $ 742.7 million, net of the initial purchasers’ discounts, commissions and offering expenses.

The Company received proceeds of $ 742.7 million, after deducting the initial purchasers’ discounts, commissions and offering expenses.

The net proceeds were used to redeem all of its then outstanding 6.0 % Senior Notes due in 2025 and, the remaining net proceeds were available for general corporate purposes which may include acquisitions and the repurchase or redemption of other outstanding indebtedness.

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These covenants contain certain exceptions.

Restricted payments are applicable only if the Company and subsidiaries designated as restricted subsidiaries have a net leverage ratio of greater than 3.5 to 1.0.

Restricted payments are applicable only

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if the Company and subsidiaries designated as restricted subsidiaries have a net leverage ratio of greater than 3.5 to 1.0.

In addition, if such net leverage ratio is in excess of 3.5 to 1.0, the restriction on restricted payments is subject to various exceptions, including the total aggregate amount not exceeding the greater of (A) $ 250 million and (B) 50.0 % of EBITDA for the most recently ended four fiscal quarter period ended immediately prior to such date for which internal financial statements are available.

The Company is in compliance with its debt covenants for the 4.625 % Senior Notes as of September 30, 2024.

Cumulatively as of September 30, 2024, the Company has repurchased approximately $ 290 million in aggregate principal of its 4.625 % Senior Notes.

There were no repurchases of 4.625 % Senior Notes during the three and nine months ended September 30, 2024 and September 30, 2023.

The Company is in compliance with its debt covenants for the 4.625 % Senior Notes as of March 31, 2025.

Cumulatively as of March 31, 2025, the Company repurchased approximately $ 290 million in aggregate principal of its 4.625 % Senior Notes.

There were no repurchases of 4.625 % Senior Notes during the three months ended March 31, 2025 and March 31, 2024.

1.75 % Convertible Notes

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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 September 30, 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 the three months ended September 30, 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.

During the three and nine months ended September 30, 2023, the Company recorded $ 0.3 million and $ 7.7 million of interest expense related to the 1.75 % Convertible Notes for such additional interest.

In August 2023, $ 7.0 million of this interest obligation was paid by the Company to the trustee under the indenture for the 1.75 % Convertible Notes, which was paid to holders of record in August

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

The Company paid its remaining obligation of approximately $ 0.7 million as of November 1, 2023.

As of August 1, 2023, the Company has complied with the conditions set forth in the indenture.

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

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 March 31, 2025, the remaining principal amount of the 1.75 % Convertible Notes was $ 149.1 million.

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 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.

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.

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 September 30, 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 Condensed Consolidated Balance Sheets.

As of September 30, 2024, the conversion rate is 9.3783 shares of the Company’s common stock for each $1,000 principal amount of 1.75 % Convertible Notes (or 1,398,391 shares), which represents a conversion price of approximately $ 106.63 per share of the Company’s common stock.

As of March 31, 2025 and December 31, 2024, 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 Condensed Consolidated Balance Sheets.

As of March 31, 2025, the conversion rate is 9.3783 shares of the Company’s common stock for each $1,000 principal amount of 1.75 % Convertible Notes (or 1,398,391 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.

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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(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;

(iii) effectively junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such

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indebtedness;

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

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

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

Three months ended March 31,

Contractual interest expense $ 652 $ 2,406

Amortization of discount and deferred issuance costs

185 466 1,128 1,395

Total interest expense related to 1.75 % Convertible Notes

$ 775 $ 2,876

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3.625 % Convertible Notes

2 unchanged sentences

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 Condensed 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, at an effective interest rate of 4.2 %, to interest expense through the maturity date.

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.

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(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 five 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;

(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.

2 unchanged sentences

As of September 30, 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 Condensed Consolidated Balance Sheets.

As of September 30, 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.

As of March 31, 2025 and 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 Condensed Consolidated Balance Sheets.

As of March 31, 2025, 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.

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

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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.

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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 the components of interest expense related to the 3.625 % Convertible Notes (in thousands):

Three months ended

September 30, 2024

March 31, 2025

Coupon interest expense $ 2,385

2 unchanged sentences

Credit Agreement

On April 7, 2021, the Company entered into a $ 100.0 million credit agreement (as amended, the “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 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 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.

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, plus a credit spread adjustment equal to 0.10 %.

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 September 30, 2024, there were no amounts outstanding under the Credit Agreement.

As of each September 30, 2024 and December 31, 2023, net availability under the Credit Agreement was $ 350.0 million.

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.

1 unchanged sentence

The Credit Agreement also sets forth customary events of default, including, among other things, the failure to make timely payments under the Credit Facility, the failure to satisfy certain covenants, cross-default and cross-acceleration to other material debt for borrowed money, the occurrence of a change of control, and specified events of bankruptcy and insolvency.

The Company is in compliance with its debt covenants for the Credit Agreement as of September 30, 2024.

The Company is in compliance with its debt covenants for the Credit Agreement as of March 31, 2025.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

As of each March 31, 2025 and December 31, 2024, availability under the Credit Agreement was $ 348.9 million, net of letters of credit.

Commitments and Contingencies

4 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 consolidated financial position, results of operations, or cash flows.

The Company does not believe, based on current knowledge, that any such legal proceedings or claims, 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 have been incurred, GAAP requires us to disclose an estimate of the reasonably possible loss or range of loss or make a statement that such an estimate cannot be made.

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 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.

The court appointed a lead plaintiff.

The Company moved to dismiss the consolidated class action complaint.

The court granted the motion to dismiss and the plaintiff filed an amended complaint.

The Company moved to dismiss the amended complaint.

On August 8, 2022, the court granted the Company’s motion to dismiss the amended complaint without leave to amend.

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.

The lawsuit alleges violations of Section 14(a), Section 10(b), Section 20(a) and Rule 10b-5 of the Securities Exchange Act of 1934, as well as breach of fiduciary duty, unjust enrichment and abuse of control.

On March 24, 2021, Fritz Ringling filed a lawsuit in the District of Delaware (21-cv-00421-UNA) asserting substantially similar derivative claims, and on April 8, 2021, the district court consolidated the two actions under the caption In re J2 Global Stockholder Derivative Litigation.

20-cv-01687-LPS.

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.

5 unchanged sentences

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 $ 26.9 million and $ 28.1 million as of September 30, 2024 and December 31, 2023, respectively, which are included in ‘Accounts payable’ and ‘Other long-term liabilities’ on the Condensed Consolidated Balance Sheet.

It is reasonably possible that additional liabilities could be incurred resulting in additional expense,

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which could have a material impact to our financial results, however, as of September 30, 2024 any potential range of loss is not estimable.

The Company established reserves for these matters of $ 23.5 million and $ 25.2 million as of March 31, 2025 and December 31, 2024, respectively, which are included in ‘Accounts payable and accrued expenses’ and ‘Other noncurrent liabilities’ on the Condensed Consolidated Balance Sheets.

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 March 31, 2025 any potential range of loss was not estimable.

The Company’s tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate adjusted for discrete interim period tax impacts.

Each quarter the Company updates its estimated annual effective tax rate and, if the estimate changes, makes a cumulative adjustment.

The Company’s effective tax rate was ( 34.9 )% and ( 20.7 )% for the three months ended September 30, 2024 and 2023, respectively, and 149.0 % and ( 1,040.8 )% for the nine months ended September 30, 2024 and 2023, respectively.

The Company’s effective tax rate for the three and nine months ended September 30, 2024 was disproportionately impacted by the goodwill impairment of $ 85.3 million related to the reassessment of the fair value of certain reporting units within the Digital Media reportable segment, for which no corresponding tax benefit was recorded since it entirely related to the excess financial statement goodwill with no tax basis.

Additionally, during the nine months ended September 30, 2024, the Company recognized a net valuation allowance against a portion of its U.

The Company’s effective tax rate was 32.8 % and 42.2 % for the three months ended March 31, 2025 and 2024, respectively.

The Company’s effective tax rate for the three months ended March 31, 2025 was impacted by a discrete tax expense of $ 1.8 million related to the vesting of share-based compensation resulting in a tax shortfall.

The Company’s effective tax rate for the three months ended March 31, 2024 was impacted disproportionately by the recognition of a valuation allowance against a portion of its U.S.

capital loss carryforwards, which resulted in a discrete tax charge of $ 3.2 million.

The Company’s effective tax rate for the three and nine months ended September 30, 2023 was disproportionately impacted by the goodwill impairment of $ 56.9 million related to the reassessment of the fair value of one of the reporting units within the Digital Media reportable segment, for which no corresponding tax benefit was recorded since it entirely related to excess financial statement goodwill with no tax basis.

As of September 30, 2024 and December 31, 2023, the Company had $ 37.0 million and $ 36.1 million, respectively, in liabilities for uncertain income tax positions included in ‘Other long-term liabilities’ on the Condensed Consolidated Balance Sheets.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

As of March 31, 2025 and December 31, 2024, the Company had $ 30.8 million and $ 30.3 million, respectively, in liabilities for uncertain income tax positions on the Condensed Consolidated Balance Sheets.

Accrued interest and penalties related to unrecognized tax benefits associated with uncertain tax positions are recognized in income tax expense in our Condensed Consolidated Statements of Operations.

As of September 30, 2024 and December 31, 2023, the Company’s prepaid taxes were $ 1.3 million and $ 4.7 million, respectively, and are included in ‘Prepaid expenses and other current assets’ in our Condensed Consolidated Balance Sheets.

Certain taxes are prepaid during the year and, where appropriate, included within ‘Prepaid expenses and other current assets’ on the Condensed Consolidated Balance Sheets.

The Company’s prepaid taxes were $ 3.4 million and $ 6.4 million as of March 31, 2025 and December 31, 2024, respectively.

Stockholders’ Equity

3 unchanged sentences

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 three and nine months ended September 30, 2024, the Company repurchased 2,000,000 and 3,500,000 shares, respectively under the 2020 Program at an aggregate cost of approximately $ 96.9 million and $ 181.8 million, respectively, including excise tax.

During the three and nine months ended September 30, 2023, the Company repurchased 605,428 and 1,585,846 shares, respectively under the 2020 Program at an aggregate cost of approximately $ 41.0 million and $ 104.9 million, respectively, including excise tax.

Cumulatively as of September 30, 2024, 8,758,692 shares were repurchased under the 2020 Program, at an aggregate cost of $ 583.6 million, including excise tax.

As a result of the repurchases, the number of shares of the Company’s common stock available for purchase as of September 30, 2024 was 6,241,308 shares.

Periodically, participants in the Company’s share-based compensation 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 and restricted stock units.

During the three months ended September 30, 2024 and 2023, the Company purchased and retired 2,464 and 9,479 shares, respectively, at an aggregate cost of approximately $ 0.1 million and $ 0.2 million, respectively, from plan participants for this purpose.

During the nine months ended September 30, 2024 and 2023, the Company purchased and retired 62,054 and 51,354 shares, respectively, at an aggregate cost of approximately $ 4.1 million and $ 3.5 million, respectively, from plan participants for this purpose.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

During the three months ended March 31, 2025 and 2024, the Company repurchased 750,000 and zero shares, respectively, under the 2020 Program at an aggregate cost of approximately $ 30.9 million and zero , respectively (including excise tax).

Cumulatively as of March 31, 2025, 9,508,692 shares were repurchased under the 2020 Program, at an aggregate cost of $ 614.5 million including excise tax.

As a result of the repurchases, the number of shares of the Company’s common stock available for repurchase as of March 31, 2025 was 5,491,308 shares.

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.

During the three months ended March 31, 2025 and 2024, the Company purchased and retired 103,228 and 58,237 shares, respectively, at an aggregate cost of approximately $ 4.3 million and $ 3.9 million, respectively, from plan participants for this purpose.

Share-Based Compensation

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Each plan is described below.

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 September 30, 2024, 435,135 shares underlying options and 694,769 shares of restricted stock units were outstanding under the Plans.

As of September 30, 2024, there were 3,582,306 additional shares underlying options, shares of restricted stock and other share-based awards available for grant under the 2024 Plan.

Collectively, the 2015 Plan and 2024 Plan are referred to herein as “Plans.” As of March 31, 2025, 435,135 shares underlying options and 2,143,996 shares of restricted stock units were outstanding under the Plans.

As of March 31, 2025, there were 1,946,971 additional shares underlying options, shares of restricted stock and other share-based awards available for grant under the 2024 Plan.

Share-Based Compensation Expense

The following table presents share-based compensation expense recorded in the Condensed Consolidated Statements of Operations during the periods presented (in thousands):

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

$ 68 $ 76 $ 191 $ 246

The following table presents the effects of share-based compensation expense in the Condensed Consolidated Statements of Operations during the periods presented (in thousands):

Three months ended March 31,

Sales and marketing 986 758

1 unchanged sentence

General, administrative, and other related costs

8,310 5,535 24,647 19,281

Total share-based compensation expense $ 9,752 $ 8,872

Restricted Stock and Restricted Stock Units

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, generally three to four years for senior staff (excluding market-based awards discussed below) and three to eight years for the Chief Executive Officer.

The Company granted 394,994 and 296,705 shares of restricted stock units (excluding awards with market conditions below) (“RSUs”) during the nine months ended September 30, 2024 and 2023, respectively.

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 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 look back (trading days).

During the nine months ended September 30, 2023, the Company awarded 167,606 PSUs at stock price targets ranging from $ 83.61 to $ 103.76 per share.

During the nine months ended September 30, 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 a 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.

ZIFF DAVIS, INC.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Share-based compensation expense related to an award with a market condition is 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.

The per share weighted average grant-date fair value for the PSUs granted during the nine months ended September 30, 2024 and 2023 were $ 87.17 and $ 70.07 , respectively.

Restricted Stock and Restricted Stock Units

The Company has awarded restricted stock and restricted stock units to its Board and senior staff pursuant to the Plans.

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 641,935 and 347,275 shares of restricted stock units (excluding awards with market conditions below) (“RSUs”) during the three months ended March 31, 2025 and 2024, respectively.

The Company has awarded certain key employees equity classified market-based restricted stock (“PSAs”) and equity classified market-based restricted stock units (“PSUs”) pursuant to the Plans.

PSAs and PSUs granted prior to 2024 have vesting conditions that are based on specific stock price targets of the Company’s common stock.

PSUs granted in 2024 and 2025 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 performance periods.

Performance periods for the PSUs granted in 2025 are two and three years.

In each of 2024 and 2025, 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.

The per share weighted average grant-date fair value of PSUs granted during the three months ended March 31, 2025 and 2024 was $ 38.80 and $ 87.17 , respectively.

The assumptions used in determining the weighted-average fair values of PSUs granted during the periods presented are as follows:

Nine months ended September 30,

Three months ended March 31,

Underlying stock price at valuation date $ 38.19 $ 66.88

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Risk-free interest rate 3.9 % 4.3 %

Restricted stock award (“RSA”) and PSA activity for the nine months ended September 30, 2024 is set forth below:

Restricted stock award (“RSA”) and PSA activity for the three months ended March 31, 2025 is set forth below:

Weighted Average

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Vested ( 27,197 ) $ 68.97 — $ —

( 154 ) 77.75 — —

Nonvested at September 30, 2024

Nonvested at March 31, 2025

27,632 $ 68.97 163,181 $ 36.27

Restricted stock unit activity for the nine months ended September 30, 2024 is set forth below:

ZIFF DAVIS, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Restricted stock unit (“RSU”) and PSU activity for the three months ended March 31, 2025 is set forth below:

Weighted Average Grant Date Fair Value

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( 10,112 ) $ 71.53 ( 24,093 ) $ 79.35

Outstanding at September 30, 2024 694,769 $ 77.40 532,727 $ 82.71

Outstanding at March 31, 2025 1,071,399 $ 52.53 1,072,597 $ 58.19

(1) Represents the number of shares at 100% achievement.

As of September 30, 2024, the Company had unrecognized share-based compensation cost of approximately $ 61.4 million associated with these restricted stock awards and restricted stock units.

As of March 31, 2025, the Company had unrecognized share-based compensation cost of approximately $ 88.3 million associated with these RSAs, PSAs, RSUs, and PSUs.

This cost is expected to be recognized over a weighted-average period of 0.8 years for RSAs and PSAs and 2.4 years for RSUs and PSUs.

ZIFF DAVIS, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Earnings Per Share

The components of basic and diluted earnings (loss) per share are as follows (in thousands, except share and per share data):

Three months ended September 30,

The components of basic and diluted earnings per share are as follows (in thousands, except share and per share data):

Three months ended March 31,

Basic Diluted Basic Diluted

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$ 24,239 $ 24,239 $ 10,627 $ 10,627

Net loss available to participating

Convertible Notes interest expense (after-tax)

4 unchanged sentences

Equity incentive plans

Convertible debt — — — —

Diluted weighted-average outstanding shares of common stock 43,924,158 43,924,158 46,062,097 46,062,097

Net loss per share

— 210,588 — 95,332

Nine months ended September 30,

Basic Diluted Basic Diluted

Numerator for basic and diluted net loss per common share:

$ ( 1,040 ) $ ( 1,040 ) $ ( 21,919 ) $ ( 21,919 )

Convertible Notes interest expense (after-tax)

Net income available to the Company’s common shareholders

$ ( 1,040 ) $ ( 1,040 ) $ ( 21,919 ) $ ( 21,919 )

Basic weighted-average outstanding shares of common stock 45,088,272 45,088,272 46,612,660 46,612,660

Dilutive effect of:

Equity incentive plans

Convertible debt — 1,398,391 — —

Diluted weighted-average outstanding shares of common stock 42,558,090 44,167,069 45,860,033 45,955,365

Net loss per share

Net income per share

$ 0.57 $ 0.56 $ 0.23 $ 0.23

For the three and nine months ended September 30, 2024 and 2023, there were 1,879,840 and 1,512,611 shares, respectively, of stock options and restricted stock excluded from the calculation of diluted shares as they were anti-dilutive due to the net loss during the 2024 and 2023 periods.

For the three months ended September 30, 2024 and 2023, 4,213,808 and 5,158,071 shares, respectively, related to convertible debt were excluded from diluted shares because they were anti-dilutive under the if-converted method for the diluted net income per share calculation of the convertible debt instrument.

For the nine months ended September 30, 2024 and 2023, 5,406,679 and 5,158,071 shares, respectively, related to convertible debt were excluded from diluted shares because they were anti-dilutive under the if-converted method for the diluted net income per share calculation of convertible debt instruments.

For the three months ended March 31, 2025 and 2024, there were 390,266 and 846,160 shares, respectively, of stock options and restricted stock excluded from the calculation of diluted shares as they were anti-dilutive due to the average stock price during the 2025 and 2024 periods.

For the three months ended March 31, 2025 and 2024, 2,631,470 and 5,158,071 shares, respectively, related to convertible debt were excluded from diluted shares because they were anti-dilutive under the if-converted method for the diluted net income per share calculation of convertible debt instruments.

ZIFF DAVIS, INC.

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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 the Company’s Annual Report on Form 10-K filed with the SEC on February 26, 2024.

The Company evaluates performance based on revenue and profit or loss from operations.

Information on reportable segments and reconciliation to income from operations is as follows (in thousands):

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

As described in its Annual Report on Form 10-K for the year ended December 31, 2024, the Company 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.

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 included in the Company’s Form 10-K for the year ended December 31, 2024.

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):

Three months ended March 31,

Revenue by reportable segment:

Digital Media $ 283,567 $ 267,951 $ 774,436 $ 755,032

Cybersecurity and Martech 70,039 73,051 214,475 219,263

Elimination of inter-segment revenues (1)

( 26 ) ( 17 ) ( 46 ) ( 152 )

Technology & Shopping $ 81,690 $ 69,267

Gaming & Entertainment 38,026 36,640

Health & Wellness 85,786 79,978

Connectivity 55,820 53,148

Cybersecurity & Martech 67,314 75,452

Total segment revenues 328,636 314,485

Total revenues $ 328,636 $ 314,485

Operating costs and expenses by reportable segment (2) :

Digital Media 308,309 280,856 732,554 702,752

Cybersecurity and Martech 55,158 60,541 168,638 181,633

Elimination of inter-segment operating expenses ( 26 ) ( 17 ) ( 46 ) ( 152 )

Total segment operating expenses 363,441 341,380 901,146 884,233

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 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Significant reportable segment expenses are set forth in the tables below (in thousands):

Three months ended March 31, 2025

Technology & Shopping Gaming & Entertainment Health & Wellness Connectivity Cybersecurity & Martech Total operating costs and expenses

Salaries, benefits, and other employee expenses $ 33,949 $ 10,614 $ 25,641 $ 13,657 $ 17,216 $ 101,077

Cloud computing, software, and other related expenses 6,803 2,037 4,012 3,983 10,185 27,020

Advertising and marketing related expenses 12,308 2,068 9,019 1,562 4,773 29,730

Partner payments 944 6,739 9,879 211 5,725 23,498

Professional and other third-party services 5,698 1,089 2,074 4,572 4,488 17,921

Depreciation and amortization 22,405 2,618 12,928 7,380 10,387 55,718

Other 3,546 (1) 4,087 (2) 5,271 (3) 4,943 (4) 3,217 (5) 21,064

Total segment operating costs and expenses 85,653 29,252 68,824 36,308 55,991 276,028

Corporate (6)

19,443 12,924 52,593 38,019

Total operating costs and expenses $ 293,506

Operating income (loss) by reportable segment:

Digital Media operating (loss) income

( 24,742 ) ( 12,905 ) 41,882 52,280

Cybersecurity and Martech operating income 14,881 12,510 45,837 37,630

Total segment operating (loss) income

Three months ended March 31, 2024

Technology & Shopping Gaming & Entertainment Health & Wellness Connectivity Cybersecurity & Martech Total operating costs and expenses

Salaries, benefits, and other employee expenses $ 28,965 $ 9,968 $ 28,306 $ 13,779 $ 19,326 $ 100,344

Cloud computing, software, and other related expenses 7,648 1,153 3,419 3,169 10,140 25,529

Advertising and marketing related expenses 10,687 1,520 9,456 1,462 5,299 28,424

Partner payments 2,428 5,938 8,110 190 4,957 21,623

Professional and other third-party services 4,778 1,122 2,023 3,110 4,121 15,154

Depreciation and amortization 17,914 2,392 13,399 7,001 7,741 48,447

Other 3,481 (1) 4,032 (2) 6,666 (3) 5,079 (4) 4,440 (5) 23,698

Total segment operating costs and expenses 75,901 26,125 71,379 33,790 56,024 263,219

Corporate (6)

Total operating costs and expenses $ 278,624

ZIFF DAVIS, INC.

AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

(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, contingent consideration changes, 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, contingent consideration changes, 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, contingent consideration changes, 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, contingent consideration changes, 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, contingent consideration changes, 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.

Information on (loss) income from operations is set forth in the table below (in thousands).

Three months ended March 31,

(Loss) income from operations by reportable segment:

Technology & Shopping ( 3,963 ) ( 6,634 )

Gaming & Entertainment 8,774 10,515

Health & Wellness 16,962 8,599

Connectivity 19,512 19,358

Cybersecurity & Martech 11,323 19,428

Total segment operating income

52,608 51,266

1 unchanged sentence

( 17,478 ) ( 15,405 )

(Loss) income from operations

Income from operations

$ 35,130 $ 35,861

(1) Inter-segment revenues relate primarily to the Digital Media reportable segment.

(2) Operating expenses for each segment include direct costs and other operating expenses that are directly attributable to the segment, such as employee compensation expense, sales and marketing expenses, engineering and network operations expense, depreciation and amortization, and other administrative expenses.

For the three and nine months ended September 30, 2024 and 2023, the Company had an impairment to goodwill within operating costs and expenses for Digital Media.

(3) Corporate includes costs associated with general, administrative, and other related costs that are managed on a global basis and that are not directly attributable to any particular segment.

(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).

Three months ended March 31,

Capital expenditures:

Technology & Shopping $ 3,606 $ 3,648

Gaming & Entertainment 1,737 2,257

Health & Wellness 9,376 8,483

Connectivity 5,235 6,843

Cybersecurity & Martech 5,485 6,918

Total from reportable segments 25,439 28,149

Corporate 180 ( 20 )

Total capital expenditures $ 25,619 $ 28,129

ZIFF DAVIS, INC.

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Non-cash investing and financing activities were as follows (in thousands):

Nine months ended September 30,

Non-cash investing activity:

Property and equipment, accrued but unpaid $ — $ 373

Right-of-use assets acquired in exchange for operating lease obligations $ 1,035 $ 1,282

Purchase of equity investments with common stock $ — $ 13,500

Three months ended March 31,

Non-cash financing activity:

Increase in fair value of conversion feature on 3.625 % Convertible Notes

Excise tax on share repurchases

$ 1,797 $ 1,038

Supplemental data (in thousands):

Nine months ended September 30,

Three months ended March 31,

Interest paid $ 5,962 $ —

1 unchanged sentence

Accumulated Other Comprehensive Loss

The following table summarizes the changes in accumulated other comprehensive (loss) income, net of tax, for the three months ended September 30, 2024 (in thousands):

Unrealized Gains on Investments

Foreign Currency Translation Total

Balance as of July 1, 2024

$ 815 $ ( 79,150 ) $ ( 78,335 )

Other comprehensive income (loss), net of tax

352 14,514 14,866

Balance as of September 30, 2024

$ 1,167 $ ( 64,636 ) $ ( 63,469 )

The following table summarizes the changes in accumulated other comprehensive loss (income), net of tax, for the nine months ended September 30, 2024 (in thousands):

The following table summarizes the changes in accumulated other comprehensive income (loss) income, net of tax, for the three months ended March 31, 2025 (in thousands):

Unrealized Gains on Investments

2 unchanged sentences

$ 2,112 $ ( 84,583 ) $ ( 82,471 )

Other comprehensive income (loss), net of tax

Other comprehensive income, net of tax

280 11,411 11,691

Balance as of September 30, 2024

Balance as of March 31, 2025

$ 2,392 $ ( 73,172 ) $ ( 70,780 )

There were no reclassifications out of accumulated other comprehensive loss for the three and nine months ended September 30, 2024 and 2023, respectively.

There were no reclassifications out of accumulated other comprehensive loss for the three months ended March 31, 2025 and 2024, respectively.

Subsequent Events

On July 31, 2023, the Company entered into an agreement to purchase $ 25.0 million of equity of OpenEvidence (formerly known as Xyla), an artificial intelligence company, for a minority ownership stake.

This minority investment was made in the form of cash and 186,102 shares of the Company’s common stock.

On April 24, 2025, we sold our minority interest in OpenEvidence for approximately $ 30 million in a combination of cash and the majority of the shares of our Common Stock that were issued in the initial transaction.

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-Q

Item 1. Financial Statements