What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-09 · 138 added, 87 removed, 303 unchanged (43% of the section changed)

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Refer to Note 13 — Segment Information for additional detail.

Revenue Overview

Revenues Overview

The primary types of revenues that we generate are described below.

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We license our proprietary technology, data, and intellectual property to third parties for various purposes.

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

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

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

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2025 2024 2025 2024

Technology & Shopping

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Subscription and licensing 13,965 14,806 27,611 28,691

Other 10 — 19 —

Total Gaming & Entertainment revenues $ 46,226 $ 42,981 $ 84,252 $ 79,621

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Subscription and licensing $ 68,349 $ 68,983 $ 135,663 $ 144,435

Other — — — —

Total Cybersecurity & Martech revenues $ 68,349 $ 68,983 $ 135,663 $ 144,435

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We use certain metrics to generally assess the operational and financial performance of our businesses.

These metrics are described in further detail below and are used by management in managing or monitoring the performance of each reportable segment when the respective revenue category is significant to the revenues of the reportable segment overall.

These metrics are described in further detail below and are used by management in managing or monitoring the performance of each reportable segment when the respective revenues category is significant to the revenues of the reportable segment overall.

For advertising and performance marketing revenues, these metrics are used for the Technology & Shopping, Gaming &

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For subscription and licensing revenues, these metrics are used for the Gaming & Entertainment, Health & Wellness, Connectivity, and Cybersecurity & Martech reportable segments.

Since all revenue is not reflected in these metrics, management does not use these metrics on a consolidated basis to evaluate performance, but rather uses them on a reportable segment basis as shown further below.

Since all revenues are not reflected in these metrics, management does not use these metrics on a consolidated basis to evaluate performance, but rather uses them on a reportable segment basis as shown further below.

Advertising and Performance Marketing - For our advertising and performance marketing revenues, management has identified net advertising and performance marketing revenue retention, the number of customers, and quarterly revenue per customer as relevant to investors’ and others’ assessment of our financial condition and results of operations.

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Similarly, we monitor the number of our customers and the revenue per customer, as defined below, as these metrics provide further details related to our reported revenue and contribute to certain of our business planning decisions.

The following table sets forth certain key operating metrics for the advertising and performance marketing revenues based on the reportable segment for the three months ended March 31, 2025 and 2024.

Three months ended March 31,

The following table sets forth certain key operating metrics for the advertising and performance marketing revenues based on the reportable segment for the three months ended June 30, 2025 and 2024.

Three months ended June 30,

Technology & Shopping

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Additionally, due to the nature of certain of the Company’s services, changes in our customer base are expected and do not have significant financial implications to the Company as the Company generally does not have significant upfront customer acquisition costs for these customers.

The following table sets forth certain key operating metrics for subscription and licensing revenues based on the reportable segment for the three months ended March 31, 2025 and 2024.

Three months ended March 31,

The following table sets forth certain key operating metrics for subscription and licensing revenues based on the reportable segment for the three months ended June 30, 2025 and 2024.

Three months ended June 30,

Gaming & Entertainment

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Our critical accounting policies are described in our 2024 Annual Report on Form 10-K filed with the SEC on February 25, 2025.

During the three months ended March 31, 2025, there were no significant changes in our critical accounting policies and estimates.

During the six months ended June 30, 2025, there were no significant changes in our critical accounting policies and estimates.

See Note 1 — Basis of Presentation and Overview in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional description of significant accounting policies of the Company.

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The Company assessed current economic indicators, including changes in economic, market and industry conditions, business strategy, cost factors, and financial performance, among others, to determine if there would be a significant decline to the fair value of a particular reporting unit.

In its analysis, the Company considered that as of March 31, 2025, the Company’s stock price per common share was at a historically low level.

The Company does not believe that this recent stock price decline, nor any other factors in its analysis noted above, constituted a triggering event during the first quarter of 2025.

In its analysis, the Company considered that as of June 30, 2025, the Company’s stock price per common share was at a historically low level.

The Company does not believe that this recent stock price decline, nor any other factors in its analysis noted above, constituted a triggering event as of June 30, 2025.

However, if the Company’s stock price does not recover in a reasonable amount of time, it may constitute a triggering event that could cause the Company to assess impairment in the future.

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

Goodwill for these two reporting units was $321.8 million as of March 31, 2025.

There were no other reporting units with less than 10% excess fair value over carrying value as of the most recent evaluation that may be at risk of impairment as of March 31, 2025.

Goodwill for these two reporting units was $321.9 million as of June 30, 2025.

There were no other reporting units with less than 10% excess fair value over carrying value as of the most recent evaluation that may be at risk of impairment as of June 30, 2025.

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.

Results of Operations for the Three Months Ended March 31, 2025

Results of Operations for the Three and Six Months Ended June 30, 2025

The main focus of our Technology & Shopping, Gaming & Entertainment, and Health & Wellness platform monetization programs is to provide relevant and useful advertising to visitors to our websites, provide meaningful content that informs and shapes purchase intent, and leverage our brand and editorial assets into subscription platforms.

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(in thousands, except percentages)

Three months ended March 31, Percentage Change

Three months ended June 30, Percentage Change Six months ended June 30, Percentage Change

2025 2024 2025 2024

Revenues $ 352,209 $ 320,800 9.8% $ 680,845 $ 635,285 7.2%

Our revenues consist of revenues from (i) advertising and performance marketing revenues, which are earned from the delivery of advertising services, marketing, performance marketing, and production services, and (ii) subscription and licensing revenues, which are earned through the granting of access to, or delivery of, certain data products or services to customers, usage-based fees, and by reselling various third-party solutions, primarily through the email security line of the Company.

Subscription and licensing revenues primarily consist of revenues from “fixed” customer subscription revenues and “variable” revenues generated from actual usage of our services.

Our revenues increased during the three months ended March 31, 2025 compared to the prior period primarily due to a $19.2 million increase in advertising and performance marketing revenue driven primarily by an increase of $13.6 million in our Technology & Shopping reportable segment and a $4.5 million increase in our Health & Wellness reportable segment.

Subscription and licensing revenues decreased $3.0 million due primarily to a decrease of $8.1 million in our Cybersecurity & Martech reportable segment, partially offset by an increase of $3.4 million in our Connectivity reportable segment and an increase of $1.5 million in our Health & Wellness reportable segment.

(in thousands, except percentages) Three months ended March 31, Percentage Change

Subscription and licensing revenues primarily consist of revenues from “fixed” customer subscription and licensing revenues and “variable” revenues generated from actual usage of our services.

Our revenues increased during the three months ended June 30, 2025 compared to the prior period primarily due to a $26.5 million increase in advertising and performance marketing revenues driven primarily by a $12.2 million increase in our Health & Wellness reportable segment and a $9.5 million increase in our Technology & Shopping reportable segment.

Subscription and licensing revenues increased $7.2 million compared to the prior year period due primarily to a $6.4 million increase in our Connectivity reportable segment.

Our revenues increased during the six months ended June 30, 2025 compared to the prior period primarily due to a $45.6 million increase in advertising and performance marketing revenues driven primarily by a $23.1 million increase in our Technology & Shopping reportable segment and a $16.6 million increase in our Health & Wellness reportable segment.

Subscription and licensing revenues increased $4.2 million compared to the prior year period due primarily to a $9.7 million increase in our Connectivity reportable segment, a $3.0 million increase in our Health & Wellness reportable segment, partially offset by a $8.8 million decrease in our Cybersecurity & Martech reportable segment.

(in thousands, except percentages) Three months ended June 30, Percentage Change Six months ended June 30, Percentage Change

2025 2024 2025 2024

$ 48,974 $ 50,024 (2.1)% $ 96,182 $ 95,911 0.3%

As a percent of revenues

13.9 % 15.6 % 14.1 % 15.1 %

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

The increase in direct costs for the three months ended March 31, 2025 compared to the prior period was primarily due to a $1.1 million increase in professional and third-party services.

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

The decrease in direct costs for the three months ended June 30, 2025 compared to the prior period was primarily due to a $0.5 million decrease in cloud computing, software, and other related expenses.

The increase in direct costs for the six months ended June 30, 2025 compared to the prior period was primarily due to a $0.7 million increase in professional and third-party services, as well as a $0.3 million increase in cloud computing, software, and other related expenses, partially offset by a $0.9 million decrease in salaries, benefits, and other employee expenses.

Sales and Marketing

(in thousands, except percentages) Three months ended March 31, Percentage Change

(in thousands, except percentages) Three months ended June 30, Percentage Change Six months ended June 30, Percentage Change

2025 2024 2025 2024

Sales and marketing

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Our internet-based advertising relationships consist primarily of fixed cost and performance-based (cost-per-impression, cost-per-click, and cost-per-acquisition) advertising relationships with an array of online service providers.

The increase in sales and marketing expenses during the three months ended March 31, 2025 compared to the prior period was primarily due to a $6.4 million increase in salaries, benefits, and other employee expenses, a $2.5 million increase in partner payments, and a $1.7 million increase in other marketing expenses.

The increase in sales and marketing expenses during the three months ended June 30, 2025 compared to the prior period was primarily due to a $7.3 million increase in salaries, benefits, and other employee expenses as a result of current and prior year acquisitions, a $3.6 million increase in professional and third-party services as a result of a current year acquisition, and a $3.7 million increase in partner payments.

The increase in sales and marketing expenses during the six months ended June 30, 2025 compared to the prior period was primarily due to a $11.9 million increase in salaries, benefits, and other employee expenses as a result of current and prior year acquisitions, a $6.6 million increase in professional and third-party services as a result of a current year acquisition, and a $6.2 million increase in partner payments, and a $2.8 million increase in advertising and marketing related expenses.

Research, Development, and Engineering

(in thousands, except percentages) Three months ended March 31, Percentage Change

(in thousands, except percentages) Three months ended June 30, Percentage Change Six months ended June 30, Percentage Change

2025 2024 2025 2024

Research, development, and engineering

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As a percent of revenues

4.7 % 5.2 % 4.8 % 5.4 %

Research, development, and engineering costs consist primarily of salaries, benefits, and other employee expenses.

The decrease in research, development, and engineering costs for the three months ended March 31, 2025, compared to the prior period was primarily due to a $2.3 million decrease in salaries, benefits, and other employee expenses, a $0.5 million increase in a professional and other third-party services, partially offset by a $1.1 million increase in cloud computing, software, and other related expenses.

The decrease in research, development, and engineering costs for the three months ended June 30, 2025, compared to the prior period was primarily due to a $1.1 million decrease in salaries, benefits, and other employee expenses and a $0.4 million decrease in a professional and other third-party services, partially offset by a $1.3 million increase in cloud computing, software, and other related expenses.

The decrease in research, development, and engineering costs for the six months ended June 30, 2025, compared to the prior period was primarily due to a $3.4 million decrease in salaries, benefits, and other employee expenses and a $1.0 million decrease in professional and other third-party services, partially offset by a $2.4 million increase in cloud computing, software, and other related expenses.

General, Administrative, and Other Related Costs

(in thousands, except percentages) Three months ended March 31, Percentage Change

(in thousands, except percentages) Three months ended June 30, Percentage Change Six months ended June 30, Percentage Change

2025 2024 2025 2024

General, administrative, and other related costs

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General, administrative, and other related costs consist primarily of salaries, benefits, and other employee expenses including share-based compensation and severance, changes in the fair value associated with contingent consideration, bad debt expense, professional fees, and insurance costs.

The decrease in general, administrative, and other related costs for the three months ended March 31, 2025 compared to the prior period was primarily due to a $1.8 million decrease in the fair value of contingent consideration estimate, a $1.3 million decrease in office expenses, partially offset by a $0.8 million increase in cloud computing, software, and other related expenses.

The increase in general, administrative, and other related costs for the three months ended June 30, 2025 compared to the prior period was primarily due to a $6.1 million reduction in expense in 2024 from changes in estimated amounts of deferred acquisition payments related to previously acquired businesses, which did not reoccur in 2025 and a $1.2 million increase in professional and other third-party services in 2025, partially offset by a $1.0 million decrease in salaries, benefits, and other employee expenses.

The increase in general, administrative, and other related costs for the six months ended June 30, 2025 compared to the prior period was primarily due to a $6.1 million reduction in expense in 2024 from changes in estimated amounts of deferred acquisition payments related to previously acquired businesses, which did not reoccur in 2025 and a $1.5 million increase in cloud computing, software, and other related expenses in 2025, partially offset by a $2.3 million decrease in the fair value of contingent consideration and a $2.1 million decrease in sales taxes.

Depreciation and Amortization

(in thousands, except percentages) Three months ended March 31, Percentage Change

(in thousands, except percentages) Three months ended June 30, Percentage Change Six months ended June 30, Percentage Change

2025 2024 2025 2024

Depreciation and amortization

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Depreciation and amortization costs consist of depreciation related to property and equipment, including internally developed software, as well as amortization of intangible assets recorded in connection with business acquisitions, and other intangible assets of the Company.

The increase in depreciation and amortization for the three months ended March 31, 2025 compared to the prior period was primarily due to an increase of $6.5 million in depreciation and amortization expense as capitalized software was placed in service and as a result of new intangible assets acquired during 2024 in business combinations.

The increase in depreciation and amortization for the three months ended June 30, 2025 compared to the prior period was primarily due to an increase of $3.4 million in depreciation expense as capitalized software was placed in service and an increase of $2.8 million in amortization expense as a result of new intangible assets acquired during 2024 in business combinations.

The increase in depreciation and amortization for the six months ended June 30, 2025 compared to the prior period was primarily due to an increase of $7.6 million in depreciation expense as capitalized software was placed in service and an increase of $5.2 million in amortization expense as a result of new intangible assets acquired during 2024 in business combinations.

Non-Operating Income and Expenses

The following table represents the components of non-operating income and expenses for the three months ended March 31, 2025 and 2024 (in thousands):

Three months ended March 31, Percentage Change

The following table represents the components of non-operating income and expenses for the three and six months ended June 30, 2025 and 2024 (in thousands):

Three months ended June 30, Percentage Change Six months ended June 30, Percentage Change

2025 2024 2025 2024

Interest expense, net $ (6,523) $ (1,804) 261.6 % $ (12,654) $ (3,573) 254.2 %

Loss on sale of businesses — — 0.0% — (3,780) (100.0) %

Loss on investments, net — (10,705) (100.0) %

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

Gain (loss) on investments, net 4,340 3,051 42.2 % 4,340 (7,654) (156.7) %

Other (loss) income, net (5,786) 5,267 (209.9) % (8,589) 5,163 (266.4) %

Total non-operating expense

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Interest expense is generated primarily from interest due on outstanding debt, partially offset by interest income generated from interest earned on cash, cash equivalents, and investments.

Interest expense, net increased during the three months ended March 31, 2025 compared to the prior period primarily due to lower interest income on investments due to a decline in cash equivalents.

Interest expense, net increased during the three and six months ended June 30, 2025 compared to the prior periods primarily due to lower interest income on investments as a result of a decline in cash equivalents and a reduction in rate.

Loss on sale of businesses .

Loss on sale of businesses during the three months ended March 31, 2024 represents the loss on disposal of an international business in the Technology & Shopping reportable segment.

Loss on investments, net.

Loss on investments, net is generated from realized and unrealized gains or losses from investments in equity and debt securities.

Loss on investment, net recorded in during the three months ended March 31, 2024 included the change in in the fair value of the Company’s investment in Consensus common stock prior to the disposition of the investment during the second quarter of 2024.

Other loss, net.

Other loss, net is generated primarily from miscellaneous items and gains or losses on foreign currency.

Loss on sale of businesses during the six months ended June 30, 2024 represents the loss on disposal of an international business in the Technology & Shopping reportable segment.

Gain (loss) on investments, net.

Gain (loss) on investments, net is generated from realized and unrealized gains or losses from investments in equity and debt securities.

Gain on investments, net recorded during the three and six months ended June 30, 2025 related to the disposition of the minority equity ownership interest in OpenEvidence (formerly known as Xyla).

Gain (loss) on investments, net recorded in during the three and six months ended June 30, 2024 related to the change in the fair value of our investment in Consensus common stock prior to the disposition of the investment and the results of the disposition of the Consensus common stock during the second quarter of 2024.

Other (loss) income, net.

Other (loss) income, net is generated primarily from miscellaneous items and gains or losses on foreign currency.

The change was primarily attributable to changes in gains or losses on foreign currency.

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When necessary, we establish valuation allowances to reduce our deferred tax assets to an amount that will more likely than not be realized.

Provision for income taxes amounted to income tax expense of $8.6 million and $8.2 million for the three months ended March 31, 2025 and 2024, respectively.

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

The change in our effective income tax rate for the three months ended March 31, 2025 compared to the prior period was primarily attributable to the following:

a decrease in our effective income tax rate due to a valuation allowance against a portion of our U.S.

capital loss carryforwards, which resulted in a discrete tax charge recognized during the three months ended March 31, 2024 of $3.2 million with no similar event during the three months ended March 31, 2025;

Provision for income taxes amounted to income tax expense of $4.3 million and $7.0 million for the three months ended June 30, 2025 and 2024, respectively, and $12.9 million and $15.2 million for the six months ended June 30, 2025 and 2024, respectively.

Our effective tax rate was 16.8% and 19.9% for the three months ended June 30, 2025 and 2024, respectively, and 24.9% and 27.9% for the six months ended June 30, 2025 and 2024, respectively.

The decrease in our effective income tax rate for the three months ended June 30, 2025 compared to the prior period was primarily attributable to the following:

a partial release of the valuation allowance against our U.S.

capital loss carryforwards, which resulted in a discrete benefit of $3.2 million recognized during the 2025 period as compared to a discrete tax benefit of $0.8 million recognized during the 2024 period;

partially offset by

an increase in our effective income tax rate due to an increase in the discrete tax charge related to the vesting of share-based compensation resulting in a $1.3 million greater tax shortfall period over period.

an increase in a discrete charge of $0.5 million due to the recognition of the foreign exchange tax impact on dividends received from the Company’s foreign subsidiaries.

The decrease in our effective income tax rate for the six months ended June 30, 2025 compared to the prior period was primarily attributable to the following:

a partial release of the valuation allowance against our U.S.

capital loss carryforwards which resulted in a discrete tax benefit of $3.2 million recognized during the 2025 period as compared to a discrete tax expense of $2.5 million recognized during 2024 period;

partially offset by

an increase in a discrete tax charge $1.5 million related to the vesting of share-based compensation where the cumulative book expense exceeds the realized tax deduction.

Judgment is required in determining our provision for income taxes and in evaluating our tax positions on a worldwide basis.

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Certain of these tax positions have in the past been, and are currently being, challenged, and this may have a significant impact on our effective tax rate if our tax reserves are insufficient.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law which, among other things, provided a permanent extension of certain tax measures initially established under the 2017 Tax Cuts and Jobs Act, which were set to expire at the end of 2025, and modified tax legislation affecting bonus depreciation rules and the tax treatment of research and development expenses and interest deductions.

Specifically, the OBBBA provides for 100% bonus depreciation and eliminates the requirement under Internal Revenue Code Section 174 to capitalize and amortize U.S.

based research and experimental expenditures over five years, making these expenditures fully deductible in the period incurred beginning after 2024.

The Company currently does not expect the OBBBA to have a material impact to our effective tax rate but expect these provisions to result in a reduction of current income tax liabilities and an increase in deferred tax liabilities, which could be material.

The Company will continue to assess the implications of the OBBBA and will provide further disclosures in subsequent reporting periods as necessary.

Equity Method Investment

Income (loss) from equity method investment, net of tax.

Income (loss) from equity method investment was primarily generated from the investment in the OCV Fund I, LP (the “OCV Fund”) for which the Company receives annual audited financial statements.

Income from equity method investment, net of tax.

Income from equity method investment was primarily generated from the investment in the OCV Fund I, LP (the “OCV Fund”) for which the Company receives annual audited financial statements.

The investment in the OCV Fund is presented net of tax.

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

Income from equity method investment was $6.6 million, net of income tax, for the three months ended March 31, 2025 compared to loss from equity method investment of $0.6 million, net of income tax, for the three months ended March 31, 2024.

The increase in income from equity method investment, net during the three months ended March 31, 2025 compared to the prior period was primarily due to an increase in the value of the underlying investment.

Income from equity method investment was $5.1 million, net of income tax, for the three months ended June 30, 2025 compared to income from equity method investment of $8.8 million, net of income tax, for the three months ended June 30, 2024.

Income from equity method investment was $11.7 million, net of income tax, for the six months ended June 30, 2025 compared to income from equity method investment of $8.2 million, net of income tax, for the six months ended June 30, 2024.

The decrease in income from equity method investment, net during the three months ended June 30, 2025 compared to the prior period was primarily due to a smaller increase in the value of the underlying investment.

The increase in income from equity method investment, net during the six months ended June 30, 2025 compared to the prior period was primarily due to a greater increase in the value of the underlying investment.

Segment Results

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The financial results are presented as follows (in thousands):

Three months ended March 31, Percentage Change

Three months ended June 30, Percentage Change Six months ended June 30, Percentage Change

2025 2024 2025 2024

$ 80,776 $ 72,567 11.3 % $ 162,466 $ 141,834 14.5 %

Operating costs and expenses

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$ (7,944) $ (8,067) (1.5) % $ (11,907) $ (14,701) (19.0) %

Technology & Shopping’s revenues of $81.7 million during the three months ended March 31, 2025 increased $12.4 million compared to the prior period primarily due to an increase in advertising and performance marketing revenues of $13.6 million primarily driven by an increase of $11.2 million related to an acquisition in the technology business during 2024 and an increase of $0.5 million in subscription and licensing revenues, partially offset by a decline of $1.7 million in other revenues.

Technology & Shopping’s operating costs and expenses of $85.7 million during the three months ended March 31, 2025 increased $9.8 million compared to the prior period primarily due to a $5.0 million increase in salaries, benefits, and other employee expenses and a $4.5 million increase in depreciation and amortization, driven by acquisitions during 2024.

As a result of these factors, Technology & Shopping’s operating loss of $4.0 million during the three months ended March 31, 2025 decreased $2.7 million compared to the prior period.

Technology & Shopping’s revenues of $80.8 million during the three months ended June 30, 2025 increased $8.2 million compared to the prior period primarily due to a $9.5 million increase in advertising and performance marketing revenues, primarily driven by a $12.0 million increase in the Technology business as a result of an acquisition in 2024, and a $0.8 million increase in subscription and licensing revenues, partially offset by a $1.2 million decline in other revenues.

Technology & Shopping’s revenues of $162.5 million during the six months ended June 30, 2025 increased $20.6 million compared to the prior period primarily due to a $23.1 million increase in advertising and performance marketing revenues, primarily driven by a $23.3 million increase in the Technology business as a result of an acquisition in 2024, and a $1.2 million increase in subscription and licensing revenues, partially offset by a decline of $3.7 million in other revenues.

Technology & Shopping’s operating costs and expenses of $88.7 million during the three months ended June 30, 2025 increased $8.1 million compared to the prior period driven by acquisitions during 2024 and were primarily due to a $3.2 million increase in depreciation and amortization, a $3.0 million increase in salaries, benefits, and other employee expenses, and a $2.7 million increase in professional and other third-party services, partially offset by $1.0 million decrease in partner payments.

Technology & Shopping’s operating costs and expenses of $174.4 million during the six months ended June 30, 2025 increased $17.8 million compared to the prior period driven by acquisitions during 2024 and were primarily due to a $8.0 million increase in salaries, benefits, and other employee expenses, a $7.7 million increase in depreciation and amortization, and a $3.7 million increase in professional and other third-party related expenses, partially offset by a $2.5 million decrease in partner payments.

As a result of these factors, Technology & Shopping’s operating loss of $7.9 million during the three months ended June 30, 2025 decreased $0.1 million compared to the prior period.

Technology & Shopping’s operating loss of $11.9 million during the six months ended June 30, 2025 decreased $2.8 million compared to the prior period.

Gaming & Entertainment

The financial results are presented as follows (in thousands):

Three months ended March 31, Percentage Change

Three months ended June 30, Percentage Change Six months ended June 30, Percentage Change

2025 2024 2025 2024

$ 46,226 $ 42,981 7.5 % $ 84,252 $ 79,621 5.8 %

Operating costs and expenses

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$ 11,255 $ 8,198 37.3 % $ 20,029 $ 18,713 7.0 %

Gaming & Entertainment’s revenues of $38.0 million during the three months ended March 31, 2025 increased $1.4 million compared to the prior period primarily due to an increase in advertising and performance marketing revenues of $1.6 million primarily driven by an acquisition during 2024, partially offset by a decrease of $0.2 million in subscription and licensing revenues.

Gaming & Entertainment’s operating costs and expenses of $29.3 million during the three months ended March 31, 2025 increased $3.1 million compared to the prior period primarily due to an increase in cloud computing, software, and other related expenses of approximately $0.9 million, an increase in partner payments of approximately $0.8 million, and an increase in salaries, benefits, and other employee expenses of approximately $0.6 million.

As a result of these factors, Gaming & Entertainment’s operating income of $8.8 million during the three months ended March 31, 2025 decreased $1.7 million compared to the prior period.

Gaming & Entertainment’s revenues of $46.2 million during the three months ended June 30, 2025 increased $3.2 million compared to the prior period primarily due to a $4.1 million increase in advertising and performance marketing revenues primarily driven by an acquisition during 2024, partially offset by a $0.8 million decrease in subscription and licensing revenues.

Gaming & Entertainment’s revenues of $84.3 million during the six months ended June 30, 2025 increased $4.6 million compared to the prior period primarily due to a $5.7 million increase in advertising and performance marketing revenues primarily driven by an acquisition during 2024, partially offset by a decrease of $1.1 million in subscription and licensing revenues.

Gaming & Entertainment’s operating costs and expenses of $35.0 million during the three months ended June 30, 2025 increased $0.2 million compared to the prior period primarily due to a $0.7 million increase in cloud computing, software, and other related expenses, partially offset by a $0.5 million decrease in salaries, benefits, and other employee expenses.

Gaming & Entertainment’s operating costs and expenses of $64.2 million during the six months ended June 30, 2025 increased $3.3 million compared to the prior period primarily due to a $1.6 million increase in cloud computing, software, and other related expenses, a $0.5 million increase in partner payments, a $0.5 million increase in advertising and marketing related expenses, and a $0.4 million increase in depreciation and amortization.

As a result of these factors, Gaming & Entertainment’s operating income of $11.3 million during the three months ended June 30, 2025 increased $3.1 million compared to the prior period.

Gaming & Entertainment’s operating income of $20.0 million during the six months ended June 30, 2025 increased $1.3 million compared to the prior period.

Health & Wellness

The financial results are presented as follows (in thousands):

Three months ended March 31, Percentage Change

Three months ended June 30, Percentage Change Six months ended June 30, Percentage Change

2025 2024 2025 2024

$ 99,452 $ 85,988 15.7 % $ 185,238 $ 165,966 11.6 %

Operating costs and expenses

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$ 16,018 $ 13,302 20.4 % $ 32,980 $ 21,901 50.6 %

Health & Wellness’s revenues of $85.8 million during the three months ended March 31, 2025 increased $5.8 million compared to the prior period primarily due to an increase in advertising and performance marketing revenues of $4.5 million, driven by an increase in the Health & Wellness Consumer business due in part to an acquisition in 2025, and an increase in subscription and licensing revenues of $1.5 million.

Health & Wellness’s operating costs and expenses of $68.8 million during the three months ended March 31, 2025 decreased $2.6 million compared to the prior period primarily due to a decrease of $2.7 million in salaries, benefits, and other employee expenses, partially offset by a $1.8 million increase in partner payments.

As a result of these factors, Health & Wellness’s operating income of $17.0 million during the three months ended March 31, 2025 increased $8.4 million compared to the prior period.

Health & Wellness’s revenues of $99.5 million during the three months ended June 30, 2025 increased $13.5 million compared to the prior period primarily due to a $12.2 million increase in advertising and performance marketing revenues, primarily driven by a $11.4 million increase in the Health & Wellness Consumer business due in part to an acquisition in 2025, and an increase in subscription and licensing revenues of $1.4 million, partially offset by a $0.2 million decline in other revenues.

Health & Wellness’s revenues of $185.2 million during the six months ended June 30, 2025 increased $19.3 million compared to the prior period primarily due to a $16.7 million increase in advertising and performance marketing revenues, driven by a $16.5 million increase in the Health & Wellness Consumer business due in part to an acquisition in 2025, and an increase in subscription and licensing revenues of $3.0 million, partially offset by a $0.4 million decline in other revenues.

Health & Wellness’s operating costs and expenses of $83.4 million during the three months ended June 30, 2025 increased $10.7 million compared to the prior period primarily due to a $3.8 million increase in partner payments and, due in part to an acquisition in 2025, a $1.6 million increase in salaries, benefits, and other employee expenses, a $1.4 million increase in depreciation and amortization, a $1.2 million increase in advertising and marketing related expenses, and a $1.2 million increase in other expenses

Health & Wellness’s operating costs and expenses of $152.3 million during the six months ended June 30, 2025 increased $8.2 million compared to the prior period primarily due to a $5.6 million increase in partner payments and, due in part to an acquisition in 2025, a $1.3 million increase in cloud computing, software, and other related expenses, and a $0.9 million increase in depreciation and amortization.

As a result of these factors, Health & Wellness’s operating income of $16.0 million during the three months ended June 30, 2025 increased $2.7 million compared to the prior period.

Health & Wellness’s operating income of $33.0 million during the six months ended June 30, 2025 increased $11.1 million compared to the prior period.

The financial results are presented as follows (in thousands):

Three months ended March 31, Percentage Change

Three months ended June 30, Percentage Change Six months ended June 30, Percentage Change

2025 2024 2025 2024

$ 57,406 $ 50,281 14.2 % $ 113,226 $ 103,429 9.5 %

Operating costs and expenses

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$ 18,804 $ 21,702 (13.4) % $ 38,316 $ 41,060 (6.7) %

Connectivity’s revenues of $55.8 million during the three months ended March 31, 2025 increased $2.7 million compared to the prior period primarily due to an increase of $3.4 million in subscription and licensing revenues driven primarily by a $3.3 million increase in our revenues from network performance services, partially offset by a decline of $0.5 million in advertising and performance marketing revenues and a decline of $0.2 million in other revenues.

Connectivity’s operating costs and expenses of $36.3 million during the three months ended March 31, 2025 increased $2.5 million compared to the prior period primarily due to a $1.5 million increase in expense from professional and third-party services and a $0.8 million increase in cloud computing, software, and other related expenses.

As a result of these factors, Connectivity’s operating income of $19.5 million during the three months ended March 31, 2025 increased $0.2 million compared to the prior period.

Connectivity’s revenues of $57.4 million during the three months ended June 30, 2025 increased $7.1 million compared to the prior period primarily due to an increase of $6.4 million in subscription and licensing revenues driven primarily by a $6.1 million increase in our revenues from network performance services.

Connectivity’s revenues of $113.2 million during the six months ended June 30, 2025 increased $9.8 million compared to the prior period primarily due to an increase of $9.7 million in subscription and licensing revenues driven primarily by a $9.4 million increase in our revenues from network performance services.

Connectivity’s operating costs and expenses of $38.6 million during the three months ended June 30, 2025 increased $10.0 million compared to the prior period primarily due to a $6.1 million increase in other related expenses due to a 2024 reduction in expense from changes in estimated amounts of deferred acquisition payments related to previously acquired businesses not recurring in 2025, a $2.1 million increase in salaries, benefits, and other employee expenses in 2025, and a $1.6 million increase in professional and other third-party services in 2025.

Connectivity’s operating costs and expenses of $74.9 million during the six months ended June 30, 2025 increased $12.5 million compared to the prior period primarily due to a $6.1 million increase in other related expenses due to a 2024 reduction in expense from changes in estimated amounts of deferred acquisition payments related to previously acquired businesses not recurring in 2025, a $3.0 million increase in professional and other third-party services in 2025, and a $2.0 million increase in salaries, benefits, and other employee expenses in 2025.

As a result of these factors, Connectivity’s operating income of $18.8 million during the three months ended June 30, 2025 decreased $2.9 million compared to the prior period.

Connectivity’s operating income of $38.3 million during the six months ended June 30, 2025 decreased $2.7 million compared to the prior period.

Cybersecurity & Martech

The financial results are presented as follows (in thousands):

Three months ended March 31, Percentage Change

Three months ended June 30, Percentage Change Six months ended June 30, Percentage Change

2025 2024 2025 2024

$ 68,349 $ 68,983 (0.9) % $ 135,663 $ 144,435 (6.1) %

Operating costs and expenses

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$ 12,235 $ 11,547 6.0 % $ 23,558 $ 30,975 (23.9) %

Cybersecurity & Martech’s revenues of $67.3 million during the three months ended March 31, 2025 decreased $8.1 million compared to the prior period primarily due to a $6.1 million decrease in subscription and licensing revenue within the Company’s cybersecurity business.

Cybersecurity & Martech‘s operating costs and expenses of $56.0 million during the three months ended March 31, 2025 remained flat compared to the prior period.

During the three months ended March 31, 2025, depreciation and amortization expense increased by $2.6 million and was partially offset by a $2.1 million decrease in salaries, benefits, and other employees expenses.

As a result of these factors, Cybersecurity & Martech’s operating income of $11.3 million during the three months ended March 31, 2025 decreased $8.1 million compared to the prior period.

Cybersecurity & Martech’s revenues of $68.3 million during the three months ended June 30, 2025 decreased $0.6 million compared to the prior period primarily due to a $2.5 million decrease in subscription and licensing revenues within the Company’s martech business, partially offset by a $1.9 million increase in subscription and licensing revenues within the Company’s cybersecurity business.

Cybersecurity & Martech’s revenues of $135.7 million during the six months ended June 30, 2025 decreased $8.8 million compared to the prior period primarily due to a decline in subscription and licensing revenues within certain brands of each of the Company’s Martech business and Cybersecurity business.

Cybersecurity & Martech‘s operating costs and expenses of $56.1 million during the three months ended June 30, 2025 decreased $1.3 million compared to the prior period primarily due to a $1.2 million decrease in salaries, benefits, and other employees expenses and a $0.9 million decrease in advertising and marketing related expenses, partially offset by a $1.0 million increase in depreciation and amortization expense.

Cybersecurity & Martech‘s operating costs and expenses of $112.1 million during the six months ended June 30, 2025 decreased $1.4 million compared to the prior period primarily due to a $3.3 million decrease in salaries, benefits, and other employees expenses, a $1.5 million decrease in advertising and marketing related expenses, and $2.0 million decrease in other expenses, partially offset by a $3.7 million increase in depreciation and amortization expense and a $1.4 million increase in partner payments.

As a result of these factors, Cybersecurity & Martech’s operating income of $12.2 million during the three months ended June 30, 2025 increased $0.7 million compared to the prior period.

Cybersecurity & Martech’s operating income of $23.6 million during the six months ended June 30, 2025 decreased $7.4 million compared to the prior period.

Liquidity and Capital Resources

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Cash, cash equivalents, and investments consisted of (in thousands):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Cash and cash equivalents $ 457,259 $ 505,880

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Cash, cash equivalents, and investments held within domestic and foreign jurisdictions were as follows (in thousands):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Cash, cash equivalents, and investments held in domestic jurisdiction $ 508,190 $ 581,315

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Cash, cash equivalents, and investments $ 597,071 $ 664,067

During the three months ended June 30, 2025, the Company received the distribution from the OCV Fund of $9.2 million.

For information on long-term investments of the Company, refer to Note 4 — Investments in Part I Item 1 of this Quarterly Report on Form 10-Q for further details.

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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.

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

As of each June 30, 2025 and December 31, 2024, net availability under the Credit Agreement was $348.9 million, net of letters of credit.

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

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Refer to Note 7 – Debt and Note 3 — Business Acquisition to the Notes to the Condensed Consolidated Financial Statements included in Part I Item 1 of this Quarterly Report on Form 10-Q.

As of March 31, 2025, we and our subsidiaries had outstanding $864.8 million in aggregate principal amount of indebtedness.

As of March 31, 2025, our total future minimum lease payments were $35.3 million of which approximately $10.2 million future minimum lease payments are due in the succeeding twelve months.

As of March 31, 2025, our liability for uncertain tax positions was $30.8 million.

As of June 30, 2025, we and our subsidiaries had outstanding $865.4 million in aggregate principal amount of indebtedness.

As of June 30, 2025, our total future minimum lease payments were $35.2 million of which approximately $10.8 million future minimum lease payments are due in the succeeding twelve months.

As of June 30, 2025, our liability for uncertain tax positions was $31.3 million.

In the ordinary course of business, the Company enters into commitments including those related to cloud computing, information technology, security, and information and document management.

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The following table provides a summary of cash flows from operating, investing, and financing activities (in thousands):

Three months ended March 31, Change

Six months ended June 30, Change

Net cash provided by operating activities $ 77,687 $ 126,122 $ (48,435)

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Our net cash provided by operating activities resulted primarily from cash received from our customers offset by cash payments we made to third parties for their services, employee compensation, interest payments associated with our debt, and taxes.

The $54.9 million decrease in net cash provided by operating activities during the three months ended March 31, 2025 compared to the prior period was primarily related to the significant working capital usage by TDS Gift Cards (“TDS”), which has a seasonally low level of activity and free cash flow during the first quarter.

The decrease in net cash provided by operating activities includes the activities of TDS, which had a negative impact of $(84.0) million during the first quarter of 2025.

The $48.4 million decrease in net cash provided by operating activities during the six months ended June 30, 2025 compared to the prior period was primarily related to the significant working capital usage by TDS Gift Cards (“TDS”), which has a seasonally low level of activity and free cash flow during the first half of the year.

The decrease in net cash provided by operating activities includes the activities of TDS, which had a negative impact of $(86.6) million during the first half of 2025.

Investing Activities

The $6.7 million decrease in net cash used in investing activities during the three months ended March 31, 2025 compared to the prior period was primarily related to lower cash used on business acquisitions during the three months ended March 31, 2025 compared to the 2024 period as well as the lower capital expenditures.

The $11.5 million decrease in net cash used in investing activities during the six months ended June 30, 2025 compared to the prior period was primarily related to a distribution received from the OCV Fund and higher proceeds received from sale of equity investments compared to the prior period.

Financing Activities

The $28.7 million increase in net cash used in financing activities during the three months ended March 31, 2025 compared to the prior period was primarily related to increased share repurchases.

The $24.9 million decrease in net cash used in financing activities during the six months ended June 30, 2025 compared to the prior period was primarily related to a smaller amount of cash used for share repurchases.

Stock Repurchase Program

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In connection with the authorization, the Company entered into certain Rule 10b5-1 trading plans with a broker-dealer to facilitate the repurchase program.

A summary of share repurchases under the 2020 Program during the three months ended March 31, 2025 is as follows (in thousands, except share amounts):

A summary of share repurchases under the 2020 Program during the six months ended June 30, 2025 is as follows (in thousands, except share amounts):

Total number of shares repurchased Aggregate purchase price (1)

Shares remaining under repurchase authorization as of March 31, 2025

Shares remaining under repurchase authorization as of June 30, 2025

1,834,846 $66,124 4,406,462

(1) Includes the impact of excise taxes.

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

Cumulatively as of June 30, 2025, 10,593,538 shares have been repurchased under the 2020 Program, at an aggregate cost of $649.7 million (including excise tax).

These shares were subsequently retired.

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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 2. Management’s Discussion and Analysis