ZIFF DAVIS, INC. 10-Q

Item 1. Financial Statements ZIFF DAVIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands except share and per share data) September 30, 2025 December 31, 2024 ASSETS Cash and cash equivalents $ 503,368 $ 505,880 Accounts receivable, net of allowances of $ 8,430 and $ 8,148 , respectively 473,159 660,223 Prepaid expenses and other current assets 148,022 105,966 Total current assets 1,124,549 1,272,069 Long-term investments 119,557 158,187 Property and equipment, net of accumulated depreciation of $ 443,246 and $ 361,710 , respectively 207,854 197,216 Intangible assets, net 375,321 425,749 Goodwill 1,606,184 1,580,258 Deferred income taxes 7,515 7,487 Other assets 35,954 63,368 TOTAL ASSETS $ 3,476,934 $ 3,704,334 LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable and accrued expenses $ 472,066 $ 670,769 Income taxes payable, current 5,508 19,715 Deferred revenue, current 203,141 199,664 Other current liabilities 17,291 9,499 Total current liabilities 698,006 899,647 Long-term debt 865,937 864,282 Deferred revenue, noncurrent 5,622 5,504 Liability for uncertain tax positions 24,163 30,296 Deferred income taxes 45,398 46,018 Other noncurrent liabilities 38,899 47,705 TOTAL LIABILITIES 1,678,025 1,893,452 Commitments and contingencies (Note 8 ) Preferred stock, $ 0.01 par value. Authorized 1,000,000 and none issued — — Preferred stock - Series A, $ 0.01 par value. Authorized 6,000 ; total issued and outstanding zero — — Preferred stock - Series B, $ 0.01 par value. Authorized 20,000 ; total issued and outstanding zero — — Common stock, $ 0.01 par value. Authorized 95,000,000 ; total issued and outstanding 39,993,208 and 42,848,339 shares at September 30, 2025 and December 31, 2024, respectively 400 428 Additional paid-in capital 482,667 491,891 Retained earnings 1,374,616 1,401,034 Accumulated other comprehensive loss ( 58,774 ) ( 82,471 ) TOTAL STOCKHOLDERS’ EQUITY 1,798,909 1,810,882 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 3,476,934 $ 3,704,334 See Notes to Condensed Consolidated Financial Statements (Unaudited) -3- ZIFF DAVIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands except share and per share data) Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Total revenues $ 363,711 $ 353,580 $ 1,044,556 $ 988,865 Operating costs and expenses: Direct costs 53,152 51,170 149,334 147,081 Sales and marketing 137,835 127,418 407,113 369,184 Research, development, and engineering 15,402 15,255 47,756 49,824 General, administrative, and other related costs 53,996 52,417 154,976 150,432 Depreciation and amortization 57,319 51,351 170,757 151,945 Goodwill impairment 17,579 85,273 17,579 85,273 Total operating costs and expenses 335,283 382,884 947,515 953,739 Income (loss) from operations 28,428 ( 29,304 ) 97,041 35,126 Interest expense, net ( 6,496 ) ( 4,024 ) ( 19,150 ) ( 7,597 ) Loss on sale of businesses — — — ( 3,780 ) Gain (loss) on investments, net 678 — 5,018 ( 7,654 ) Provision for credit losses on investments ( 17,566 ) — ( 17,566 ) — Other income (loss), net 4,098 ( 2,633 ) ( 4,491 ) 2,530 Income (loss) before income tax expense and income (loss) from equity method investment 9,142 ( 35,961 ) 60,852 18,625 Income tax expense ( 12,778 ) ( 12,539 ) ( 25,651 ) ( 27,760 ) Income (loss) from equity method investment, net of tax 38 ( 77 ) 11,783 8,095 Net (loss) income $ ( 3,598 ) $ ( 48,577 ) $ 46,984 $ ( 1,040 ) Net (loss) income per common share: Basic $ ( 0.09 ) $ ( 1.11 ) $ 1.13 $ ( 0.02 ) Diluted $ ( 0.09 ) $ ( 1.11 ) $ 1.13 $ ( 0.02 ) Weighted average shares outstanding: Basic 40,558,629 43,924,158 41,609,182 45,088,272 Diluted 40,558,629 43,924,158 41,685,149 45,088,272 See Notes to Condensed Consolidated Financial Statements (Unaudited) -4- ZIFF DAVIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited, in thousands) Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Net (loss) income $ ( 3,598 ) $ ( 48,577 ) $ 46,984 $ ( 1,040 ) Other comprehensive (loss) income, net of tax: Foreign currency translation adjustment ( 4,405 ) 14,514 25,788 7,521 Change in fair value on available-for-sale investments, net of tax benefit of $ 884 and tax expense of $( 118 ) for the three months ended September 30, 2025 and 2024, respectively, and tax benefit of $ 697 and tax expense of $( 200 ) for the nine months ended September 30, 2025 and 2024, respectively ( 2,650 ) 352 ( 2,091 ) 630 Other comprehensive (loss) income, net of tax ( 7,055 ) 14,866 23,697 8,151 Comprehensive (loss) income $ ( 10,653 ) $ ( 33,711 ) $ 70,681 $ 7,111 See Notes to Condensed Consolidated Financial Statements (Unaudited) -5- ZIFF DAVIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands) Nine months ended September 30, 2025 2024 Cash flows from operating activities: Net income (loss) $ 46,984 $ ( 1,040 ) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 170,757 151,945 Non-cash operating lease costs 5,603 8,392 Share-based compensation 33,676 30,633 Provision for credit losses on accounts receivable 2,493 2,289 Provision for credit losses on investments 17,566 — Deferred income taxes, net 1,167 ( 14,575 ) Loss on sale of businesses — 3,780 Goodwill impairment 17,579 85,273 Changes in fair value of contingent consideration ( 2,834 ) — Income from equity method investments, net ( 11,783 ) ( 8,095 ) (Gain) loss on investments, net ( 5,018 ) 7,654 Other 2,403 2,390 Decrease (increase) in: Accounts receivable 187,760 46,576 Prepaid expenses and other current assets ( 10,325 ) ( 8,152 ) Other assets 14,658 ( 2,794 ) Increase (decrease) in: Accounts payable ( 240,398 ) ( 66,313 ) Deferred revenue ( 4,708 ) 9,269 Accrued liabilities and other current liabilities ( 9,594 ) ( 15,150 ) Net cash provided by operating activities 215,986 232,082 Cash flows from investing activities: Purchases of property and equipment ( 85,888 ) ( 79,476 ) Acquisitions, net of cash received ( 67,086 ) ( 211,526 ) Distribution from equity method investment 10,756 — Proceeds from sale of equity method investment 860 — Proceeds from sale of equity investments 25,250 19,455 Proceeds from sale of businesses, net of cash divested — 7,860 Other ( 263 ) ( 884 ) Net cash used in investing activities ( 116,371 ) ( 264,571 ) Cash flows from financing activities: Payment of debt — ( 134,989 ) Repurchase of common stock ( 113,221 ) ( 183,981 ) Issuance of common stock under employee stock purchase plan 3,751 4,525 Deferred payments for acquisitions ( 213 ) ( 7,442 ) Other ( 1,783 ) ( 1,209 ) Net cash used in financing activities ( 111,466 ) ( 323,096 ) Effect of exchange rate changes on cash and cash equivalents 9,339 4,095 Net change in cash and cash equivalents ( 2,512 ) ( 351,490 ) Cash and cash equivalents at beginning of period 505,880 737,612 Cash and cash equivalents at end of period $ 503,368 $ 386,122 See Notes to Condensed Consolidated Financial Statements (Unaudited) -6- ZIFF DAVIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited, in thousands, except share amounts) Three months ended September 30, 2025 Common stock Additional paid-in Retained Accumulated other Total Stockholders’ Shares Amount capital earnings comprehensive loss Equity Balance, July 1, 2025 41,168,057 $ 412 $ 484,498 $ 1,409,468 $ ( 51,719 ) $ 1,842,659 Net loss — — — ( 3,598 ) — ( 3,598 ) Other comprehensive loss, net of tax benefit of $ 884 — — — — ( 7,055 ) ( 7,055 ) Issuance of restricted stock, net 1,710 ( 62 ) 33 — ( 29 ) Repurchase and retirement of common stock ( 1,176,559 ) ( 12 ) ( 13,874 ) ( 30,996 ) — ( 44,882 ) Share-based compensation — — 12,111 — — 12,111 Other, net — — ( 6 ) ( 291 ) — ( 297 ) Balance, September 30, 2025 39,993,208 $ 400 $ 482,667 $ 1,374,616 $ ( 58,774 ) $ 1,798,909 Three months ended September 30, 2024 Common stock Additional paid-in Retained Accumulated other Total Stockholders’ Shares Amount capital earnings comprehensive loss Equity Balance, July 1, 2024 44,740,322 $ 447 $ 476,232 $ 1,471,543 $ ( 78,335 ) $ 1,869,887 Net loss — — — ( 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 -7- ZIFF DAVIS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited, in thousands, except share amounts) Nine months ended September 30, 2025 Common stock Additional paid-in Retained Accumulated other Total Stockholders’ Shares Amount capital earnings comprehensive loss Equity Balance, January 1, 2025 42,848,339 $ 428 $ 491,891 $ 1,401,034 $ ( 82,471 ) $ 1,810,882 Net income — — — 46,984 — 46,984 Other comprehensive income, net of tax benefit of $ 697 — — — — 23,697 23,697 Issuance of restricted stock, net 165,479 3 ( 8,110 ) 3,655 — ( 4,452 ) Issuance of shares under employee stock purchase plan 133,956 1 3,749 — — 3,750 Repurchase and retirement of common stock (1) ( 3,154,566 ) ( 32 ) ( 38,457 ) ( 76,965 ) — ( 115,454 ) Share-based compensation — — 33,591 — — 33,591 Other, net — — 3 ( 92 ) — ( 89 ) Balance, September 30, 2025 39,993,208 $ 400 $ 482,667 $ 1,374,616 $ ( 58,774 ) $ 1,798,909 (1) Includes 143,161 shares received in connection with sale of our minority equity ownership interest in OpenEvidence during the nine months ended September 30, 2025. Nine months ended September 30, 2024 Common stock Additional paid-in Retained Accumulated other Total Stockholders’ Shares Amount capital earnings comprehensive loss Equity Balance, January 1, 2024 46,078,464 $ 461 $ 472,201 $ 1,491,956 $ ( 71,620 ) $ 1,892,998 Net loss — — — ( 1,040 ) — ( 1,040 ) Other comprehensive income, net of tax expense of $( 200 ) — — — — 8,151 8,151 Issuance of restricted stock, net 69,795 — ( 5,450 ) 1,502 — ( 3,948 ) Issuance of shares under employee stock purchase plan 92,589 1 4,524 — — 4,525 Repurchase and retirement of common stock ( 3,500,000 ) ( 35 ) ( 24,973 ) ( 156,822 ) — ( 181,830 ) Share-based compensation — — 30,633 — — 30,633 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 — — 335 ( 513 ) — ( 178 ) Balance, September 30, 2024 42,740,848 $ 427 $ 480,271 $ 1,335,083 $ ( 63,469 ) $ 1,752,312 See Notes to Condensed Consolidated Financial Statements (Unaudited) -8- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Basis of Presentation and Overview The accompanying Condensed Consolidated Financial Statements of Ziff Davis, Inc. and its direct and indirect wholly-owned subsidiaries (“Ziff Davis”, the “Company”, “our”, “us”, or “we”), were prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), and all adjustments considered necessary for a fair presentation have been included. All intercompany accounts and transactions have been eliminated in consolidation. The accompanying interim Condensed Consolidated Financial Statements have been prepared in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X issued by the Securities and Exchange Commission (“SEC”). The preparation of these Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. All normal recurring adjustments necessary for a fair presentation of these interim Condensed Consolidated Financial Statements were made. This Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 25, 2025 and other filings with the SEC. The results of operations for this interim period are not necessarily indicative of the operating results that may be expected for the full year or for any future period. Description of Business 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 and nine months ended September 30, 2024, the Company reclassified depreciation of $ 2.1 million and $ 5.8 million, respectively, and amortization of $ 49.3 million and $ 146.1 million, respectively 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 Annual Report on Form 10-K for the year ended December 31, 2024. For the nine months ended September 30, 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): September 30, 2025 December 31, 2024 Settlement receivables, net $ 183,277 $ 296,553 Trade receivables, net 283,431 349,120 Other receivables 6,451 14,550 Accounts receivable, net $ 473,159 $ 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. -9- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consisted of the following (in thousands): September 30, 2025 December 31, 2024 Accounts payable $ 147,671 $ 164,352 Settlement payables, net 239,293 408,747 Accrued employee related costs 31,921 55,800 Other accrued liabilities 53,181 41,870 Accounts payable and accrued expenses $ 472,066 $ 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 September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-06, Intangible - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software . This update eliminates accounting considerations for software project development stages and replaces it with the requirement to commence software capitalization when (1) management has authorized and committed to funding the project and (2) it is probable that the project will be completed and will be used to perform its intended function. This update further provides the guidance about “probable-to-complete” recognition threshold. Specifically, such threshold is not considered being met when there is a significant uncertainty associated with the development activities of the software, This update is effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the effect of adoption of this update on our consolidated financial statements. In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides all entities with the practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Accounting Standards Codification (“ASC”) Topic 606, Revenues from Contracts with Customers (“ASC 606”). This update permits all entities to assume that current conditions as of the balance sheet date do not change for the remaining life of the current accounts receivable and current contract assets. This update is effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual reporting periods. Early adoption is permitted for financial statements that have not been issued or made available for issuance. The Company is currently evaluating the effect of adoption of this update on our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. 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. This update will result in the required additional disclosures being included in our consolidated financial statements, once adopted. -10- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued 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. 2. Revenues The following describes the nature of the Company’s primary types of revenues. Advertising and Performance Marketing Advertising and performance marketing revenues are earned primarily from the delivery of advertising services and from marketing, performance marketing, and production services. Revenues from the delivery of advertising services are earned on websites and applications that are owned and operated by the Company and on those websites and applications that are part of the Company’s advertising network. Revenues are primarily earned by generating traffic to the Company’s websites, apps, and third-party platforms on which brands of the Company have a presence and 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. The Company determines whether revenues 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 revenues are recognized on a gross basis as the Company primarily acts as a “principal” as defined under 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 revenues on a net basis with respect to revenues 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 revenues on a net basis with respect to the transfer of functional intellectual property through third-party gaming platforms and with respect to revenues earned from servicing client gift card programs. Subscription and Licensing 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. 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. 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. 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 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. Revenues will be recognized when the obligations are met, either over time or at a point in time, depending on the nature of the obligation. -11- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued • 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 they are available during the term of the support period. The Company determines whether revenues 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 revenues are recognized on a gross basis as the Company primarily acts as a “principal” as defined under ASC 606. The Company records revenues on a gross basis with respect to revenues 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 Other revenues primarily include those from the sale of hardware used in conjunction with software described above, online course revenues, game publishing revenues, and revenues from a customer acquisition platform for subscription services companies. 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. The Company determines whether revenues should be reported on a gross or net basis by assessing whether the Company is acting as the principal or an agent in the transaction, respectively. The majority of the Company’s other revenues are recognized on a gross basis as the Company primarily acts as a “principal” as defined under ASC 606. The Company records revenues on a net basis with respect to games sold on third-party platforms. -12- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued Disaggregated Revenues Revenues from external customers classified by revenue source are as follows (in thousands): Three months ended September 30, Nine months ended September 30, 2025 (1) 2024 (1) 2025 (1) 2024 (1) Technology & Shopping Advertising and performance marketing $ 84,226 $ 80,485 $ 242,500 $ 215,645 Subscription and licensing 2,777 1,594 7,581 5,155 Other ( 1,814 ) 5,047 ( 2,426 ) 8,160 Total Technology & Shopping revenues $ 85,189 $ 87,126 $ 247,655 $ 228,960 Gaming & Entertainment Advertising and performance marketing $ 31,917 $ 34,909 $ 88,539 $ 85,839 Subscription and licensing 15,657 14,795 43,268 43,486 Other 4 10 23 10 Total Gaming & Entertainment revenues $ 47,578 $ 49,714 $ 131,830 $ 129,335 Health & Wellness Advertising and performance marketing $ 85,587 $ 75,084 $ 237,049 $ 209,898 Subscription and licensing 13,679 12,751 40,494 36,539 Other 3,040 2,936 10,001 10,300 Total Health & Wellness revenues $ 102,306 $ 90,771 $ 287,544 $ 256,737 Connectivity Advertising and performance marketing $ 3,368 $ 3,135 $ 9,057 $ 8,649 Subscription and licensing 49,198 48,309 149,132 138,501 Other 4,613 4,499 12,216 12,222 Total Connectivity revenues $ 57,179 $ 55,943 $ 170,405 $ 159,372 Cybersecurity & Martech Subscription and licensing $ 69,145 $ 70,026 $ 204,808 $ 214,461 Other 2,314 — 2,314 — Total Cybersecurity & Martech revenues $ 71,459 $ 70,026 $ 207,122 $ 214,461 Total Revenues $ 363,711 $ 353,580 $ 1,044,556 $ 988,865 (1) Amounts presented are net of inter-segment revenues. The Company recorded $ 35.0 million and $ 33.9 million of revenues for the three months ended September 30, 2025 and 2024, respectively, and $ 173.9 million and $ 166.3 million of revenues for the nine months ended September 30, 2025 and 2024, respectively, which was previously included in the deferred revenues 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 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 -13- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued 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. Revenues are 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. • Consumer privacy services and data backup capabilities are provided. • Security solutions, including email and endpoint, are provided. • Access is granted to data products and services. • Continuing access to the content on our websites and apps is provided. The Company has concluded the best measure of progress toward the complete satisfaction of the performance obligation delivered over the time is a time-based measure. The Company recognizes revenues on a straight-line basis throughout the subscription period, or as usage occurs, or when functional intellectual property is delivered for services outside of the subscription. Other revenues consist primarily of performance obligations that are satisfied at a point in time at which control for goods and services is transferred to a customer. The Company believes that the methods described are a faithful depiction of the transfer of goods and services. Transaction Price Allocation to Future Performance Obligations As of September 30, 2025, the aggregate amount of transaction price that is allocated to future performance obligations was approximately $ 77.5 million and is expected to be recognized as follows: 22 % by December 31, 2025, 49 % by December 31, 2026, and 29 % 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 transaction price is a variable consideration that corresponds directly with the Company’s performance. 3. Acquisitions 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. -14- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued 2025 Acquisitions The Company completed seven immaterial acquisitions during the nine months ended September 30, 2025, paying the purchase price in cash for each transaction. These acquisitions were comprised of six acquisitions that were accounted for as business combinations and one accounted for as an asset acquisition. Total consideration for these acquisitions was $ 81.6 million, or $ 76.4 million, net of cash acquired. Goodwill recognized for these acquisitions during the nine months ended September 30, 2025 was $ 30.3 million, of which $ 21.0 million is expected to be deductible for income tax purposes. Approximately $ 40.2 million of definite-lived intangibles were recorded in connection with the acquisitions during the nine months ended September 30, 2025, including $ 25.1 million of Customer relationships, net, $ 7.0 million of Trade names and trademarks, net, and $ 8.1 million of Other purchased intangibles, net. The initial accounting for 2025 business acquisitions is incomplete due to the timing of available information and is subject to change. As of September 30, 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. 2024 Acquisitions The Company completed the following acquisitions during the year ended December 31, 2024, paying a 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 Technology & Shopping segment; (b) a purchase of 100 % of the equity interest in CNET Media, Inc. and certain related entities (“CNET”), acquired on September 12, 2024, a digital medial publication platform, which is reported within our Technology & Shopping segment; and two other immaterial acquisitions. All of these acquisitions were accounted for as business combinations. 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 businesses acquired in 2024 was $ 365.1 million, or $ 219.2 million, net of cash acquired. -15- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued The following table summarizes the fair value amounts recognized for the assets acquired and liabilities assumed for our 2024 acquisitions (in thousands): Valuation TDS CNET (2) Assets and Liabilities Cash $ 142,957 $ — Accounts receivable and other current assets (1) 171,290 17,236 Intangible assets 108,340 100,500 Goodwill (2) 81,248 36,316 Deferred tax asset, noncurrent — 11,412 Other assets 203 1,480 Accounts payable and other current liabilities ( 290,161 ) ( 11,827 ) Deferred tax liability, noncurrent ( 25,442 ) ( 169 ) Other noncurrent liabilities ( 847 ) ( 700 ) Total $ 187,588 $ 154,248 (1) The fair value of the assets acquired includes accounts receivable of $ 170.7 million (including Settlement receivables, net of $ 166.8 million) related to TDS and $ 16.5 million related to CNET. (2) During the nine months ended September 30, 2025, we recorded a measurement period adjustment of $( 1.2 ) million to Customer relationships, $ 0.7 million to Other purchased intangibles assets, $ 0.9 million to Accounts receivable and other current assets, $ 0.8 million to Other assets, $( 0.7 ) million to Other noncurrent liabilities, and $( 0.2 ) million to Deferred tax liability, noncurrent with corresponding adjustments to Goodwill. The accompanying Condensed Consolidated Statements of Operations reflect the results of operations of the 2024 acquisitions since the date of each respective acquisition. 4. Investments Investments consist of equity and debt securities. Investment in equity securities On October 7, 2021, we completed the separation of our cloud fax business (the “Separation”) into an independent publicly traded company. Following the Separation, the Company retained shares of publicly traded common stock of Consensus Cloud Solutions, Inc. (“Consensus”). During the second quarter of 2024, the Company sold its remaining 1,034,295 shares of Consensus common stock in the open market. As of December 31, 2024, the Company did not hold any shares of t 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. For the three and nine months ended September 30, 2024, loss of zero million and $ 7.7 million were recorded in the Condensed Consolidated Statement of Operations. On July 31, 2023, the Company entered into an agreement to purchase a $ 25.0 million minority equity ownership interest in OpenEvidence (formerly known as Xyla), an artificial intelligence company. This minority investment was made in the form of cash and shares of the Company’s common stock. The Company accounted for its investment in OpenEvidence 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 December 31, 2024, the investment in OpenEvidence had a carrying value of $ 25.3 million, including transaction costs, and was included in ‘Long-term investments’ in the Condensed Consolidated Balance Sheets. On April 24, 2025, the Company sold its minority interest in OpenEvidence for $ 29.7 million, including $ 25.2 million in cash and 143,161 shares of the Company’s common stock, all of which had been issued in the purchase of the minority interest in OpenEvidence. Investment in a corporate debt security On April 12, 2022, the Company entered into an agreement with an entity to acquire 4 % convertible notes with an aggregate value of $ 15.0 million. On May 19, 2023, the Company entered into the Note Amendment Agreement (the “Amendment”) with respect to the same entity. The Amendment increased the interest rate on the convertible notes to 6 %, extended the maturity date, and subordinated all existing and future obligations, liabilities, and indebtedness of the entity to the -16- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued entity’s senior creditor, as defined in the Amendment. This investment is included in ‘Short-term investments’ in the Condensed Consolidated Balance Sheets and is classified as available-for-sale. The investment was initially measured at its transaction price and subsequently re-measured at fair value, with unrealized gains and losses reported as a component of other comprehensive income. In evaluating the available-for-sale debt security, the Company elected to exclude accrued interest receivable from the fair value and amortized cost basis. The amortized cost of the available-for-sale debt security excluded accrued interest receivable of zero , net of allowance for credit losses of $ 2.6 million, as of September 30, 2025 and $ 2.1 million, net of allowance for credit losses of zero , as of December 31, 2024, which is presented in 'Prepaid expenses and other current assets' in the Condensed Consolidated Balance Sheets. During the three and nine months ended September 30, 2025, based on the latest available financial and certain other information related to the issuing entity, the Company determined that the fair value of its investment in this corporate debt security was below its amortized cost. Based on this information, the Company determined that a credit loss exists. During the three and nine months ended September 30, 2025, the Company recognized the provision for credit losses of $ 17.6 million, respectively, on total accrued interest receivable and amortized cost of the available-for-sale debt security in ‘Provision for credit losses on investments’ in the Condensed Consolidated Statements of Operations. An additional $ 3.5 million, before tax, representing the excess of unrealized losses over the provision for credit losses was recognized in ‘Accumulated other comprehensive loss’ in the Condensed Consolidated Balance Sheets. There were no investments in an unrealized loss position as of December 31, 2024. The Company does not intend to sell its available-for-sale corporate debt security. In addition, it is more likely than not that the Company will not be required to sell it before recovery of the amortized cost basis, which may be at maturity. As of September 30, 2025, the carrying value and the maximum exposure of the Company’s investment in the corporate debt security was zero and $ 15.0 million, with a contractual maturity date that was less than one year . As of December 31, 2024, both the carrying value and the maximum exposure of the Company’s investment in the corporate debt security 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 (losses) on investment in the corporate debt security as of September 30, 2025 were zero . Cumulative gross unrealized gains on investment in the corporate debt security as of December 31, 2024 were approximately $ 2.8 million. Equity method investment 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, 2025 and 2024, the Company recognized income (loss) from the equity method investment, net of taxes, of less than $0.1 million and $( 0.1 ) million, net of taxes, respectively. During the nine months ended September 30, 2025 and 2024, the Company recognized income from the equity method investment, net of taxes, of $ 11.8 million and $ 8.1 million, respectively. The income in the periods presented were primarily the result of gains or losses in the underlying investments. During the three and nine months ended September 30, 2025, the Company received a distribution from the OCV Fund of $ 1.5 million and $ 10.8 million, respectively. As of September 30, 2025, both the carrying value and the maximum exposure of the Company’s equity method investment was approximately $ 119.6 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 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 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. -17- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued 5. Fair Value Measurements The Company complies with the provisions of ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), which defines fair value, provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value. § Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. § Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. § Level 3 – Unobservable inputs which are supported by little or no market activity. 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. Recurring Fair Value Measurements The Company’s money market funds are classified within Level 1. 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 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 exchange and not an investment in a mutual fund or similar investment. The investment is classified as available-for-sale and is initially measured at its transaction price. The fair value of the corporate debt security is determined primarily based on estimates and assumptions, including Level 3 inputs. During the three and nine months ended September 30, 2025, the Company determined that the fair value of the Company’s investment in this corporate debt security fell below its amortized cost to zero based on the latest available financial and certain other information related to the issuing entity. Refer to Note 4 - Investments for further information. As of 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 three months to two years , depending on the probability scenario, 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. The valuation approaches used to value Level 3 investments considers unobservable inputs in the market such as time to liquidity, volatility, risk-free rates, dividend yield, and breakpoints. The Company also estimates the fair value of certain contingent consideration arrangements based upon its current expectation of achievement of the targets underlying the contingent consideration. Significant increases or decreases in any of the inputs in isolation could result in a significantly lower or higher fair value measurement. -18- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued In connection with certain of the Company’s acquisitions, contingent consideration may be payable upon achieving certain future earnings before interest, taxes, depreciation and amortization (“EBITDA”), gross margin, and/or revenue thresholds and had a combined fair value of $ 6.8 million and $ 2.8 million as of September 30, 2025 and December 31, 2024, respectively. As of September 30, 2025, the possible payments under these arrangements ranged from zero to a maximum total of $ 9.2 million. As of December 31, 2024, the possible payments under these arrangements ranged from zero to a maximum total of $ 2.8 million. As of 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, 2025 Level 1 Level 2 Level 3 Fair Value Carrying Value Assets: Cash equivalents: Money market and other funds $ 115,186 $ — $ — $ 115,186 $ 115,186 Total assets measured at fair value $ 115,186 $ — $ — $ 115,186 $ 115,186 Liabilities: Contingent consideration $ — $ — $ 6,768 $ 6,768 $ 6,768 Total liabilities measured at fair value $ — $ — $ 6,768 $ 6,768 $ 6,768 December 31, 2024 Level 1 Level 2 Level 3 Fair Value Carrying Value Assets: Cash equivalents: Money market and other funds $ 85,833 $ — $ — $ 85,833 $ 85,833 Long-term investments: Investment in corporate debt security — — 17,788 17,788 17,788 Total assets measured at fair value $ 85,833 $ — $ 17,788 $ 103,621 $ 103,621 Liabilities: Contingent consideration $ — $ — $ 2,834 $ 2,834 $ 2,834 Total liabilities measured at fair value $ — $ — $ 2,834 $ 2,834 $ 2,834 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, 2025 and 2024, there were no transfers that occurred between levels. -19- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued 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 security that are measured at fair value on a recurring basis (in thousands): Nine months ended September 30, 2025 2024 Contingent Consideration Arrangements Corporate Debt Security Contingent Consideration Arrangements Corporate Debt Security Balance as of January 1 $ 2,834 $ 17,788 $ 2,834 $ 15,699 Fair value at date of acquisition 6,865 — — — Fair value adjustments (1) ( 2,834 ) ( 17,788 ) — 830 Foreign currency translation adjustment $ ( 97 ) $ — $ — $ — Balance as of September 30 $ 6,768 $ — $ 2,834 $ 16,529 (1) During the nine months ended September 30, 2025, 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 and relate to changes in the expected payout against financial targets. During the nine months ended September 30, 2025 and 2024, the fair value adjustments to the corporate debt security 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) for the portion of the change that does not relate to change in credit conditions and in the ‘Provision for credit losses on investments’ in the Condensed Consolidated Statements of Operations for the portion of the change that relates to change in credit conditions. Nonrecurring Fair Value Measurements The Company’s non-financial assets, such as goodwill, intangible assets, right-of-use assets, and property, plant and equipment, are adjusted to fair value only when an impairment is recognized. The Company’s financial assets, comprised of equity securities without readily determinable fair value, are adjusted to fair value when observable price changes are identified or due to impairment. Such fair value measurements are based predominately on Level 3 inputs. Other Fair Value Disclosures The fair value of the Company’s 4.625 % Senior Notes, 3.625 % Convertible Notes, and 1.75 % Convertible Notes (as defined in Note 7 — Debt ) was determined using quoted market prices or dealer quotes for instruments with similar maturities and other terms and credit ratings, which are Level 1 inputs. If such information is not available for the 1.75 % Convertible Notes and 3.625 % Convertible Notes, the fair value is determined using cash flow models of the scheduled payments discounted at market interest rates for comparable debt without the conversion feature. The following table presents the carrying value and the fair value of financial instruments measured at fair value only for disclosure purposes (in thousands): September 30, 2025 December 31, 2024 Carrying Value Fair Value Carrying Value Fair Value 4.625 % Senior Notes $ 460,038 $ 431,286 $ 457,211 $ 420,935 1.75 % Convertible Notes $ 149,109 $ 144,449 $ 148,186 $ 139,976 3.625 % Convertible Notes $ 263,147 $ 253,937 $ 258,885 $ 259,200 -20- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued 6. Goodwill and Intangible Assets Goodwill The changes in carrying amounts of goodwill for the nine months ended September 30, 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 (Note 3) — 11,743 508 401 17,666 30,318 Goodwill impairment — — — — ( 17,579 ) ( 17,579 ) Purchase accounting adjustments (1) ( 291 ) 48 — — 123 ( 120 ) Foreign exchange translation 18 588 971 2,855 8,875 13,307 Balance as of September 30, 2025 $ 321,784 $ 80,680 $ 404,535 $ 260,198 $ 538,987 $ 1,606,184 (1) Purchase accounting adjustments relate to measurement period adjustments to goodwill in connection with prior year business acquisitions (see Note 3 — Business Acquisitions ). During the three and nine months ended September 30, 2025, the Company performed quantitative fair value tests of all of its reporting units following a sustained decline in the Company’s stock price. Based on the quantitative fair value tests, the carrying value of one reporting unit within the Cybersecurity & Martech reportable segment exceeded its fair value, and the Company recorded an impairment of approximately $ 17.6 million during the three and nine months ended September 30, 2025. During the three and nine months ended September 30, 2024, the Company reassessed the fair value of certain reporting units within the Technology & Shopping, Health & Wellness, and Cybersecurity & Martech reportable segments as a result of a sustained decline in the Company’s stock price, and forecasted reductions in revenue or EBITDA in certain of its reporting units. Based on the quantitative fair value test of two reporting units within the Technology & Shopping reportable segment, the carrying value of the reporting units exceeded their fair value, and the Company recorded an impairment of approximately $ 85.3 million during the three and nine months ended September 30, 2024. In each period, the fair value of the reporting units was determined using an equal weighting of an income approach that was based on the discounted estimated future cash flows of the reporting unit and a market approach that uses the guideline public company approach. We believe the combination of these approaches provides an appropriate valuation because it incorporates the expected cash generation of the reporting unit in addition to how a third-party market participant would value the reporting unit. As the business is assumed to continue in perpetuity, the discounted future cash flows include a terminal value. 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. Goodwill as of September 30, 2025 reflects accumulated impairment losses of $ 169.5 million in the Technology & Shopping reportable segment and $ 17.6 million in the Cybersecurity & Martech reportable segment. Goodwill as of December 31, 2024 reflects accumulated impairment losses of $ 169.5 million in the Technology & Shopping reportable segment. -21- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued Intangible Assets Subject to Amortization As of September 30, 2025, intangible assets subject to amortization relate primarily to the following (in thousands): Historical Cost Accumulated Amortization Net Trade names and trademarks $ 391,733 $ 254,573 $ 137,160 Customer relationships 829,220 636,425 192,795 Other purchased intangibles 421,461 376,095 45,366 Total $ 1,642,414 $ 1,267,093 $ 375,321 As of December 31, 2024, intangible assets subject to amortization relate primarily to the following (in thousands): Historical Cost Accumulated Amortization Net Trade names and trademarks $ 375,449 $ 222,430 $ 153,019 Customer relationships 836,254 620,926 215,328 Other purchased intangibles 421,128 363,726 57,402 Total $ 1,632,831 $ 1,207,082 $ 425,749 Amortization expense, included in ‘Depreciation and amortization’ in our Condensed Consolidated Statements of Operations, was approximately $ 31.3 million and $ 28.5 million for the three months ended September 30, 2025 and 2024, respectively, and $ 90.7 million and $ 82.5 million for the nine months ended September 30, 2025 and 2024, respectively. 7. Debt Long-term debt consists of the following (in thousands): September 30, 2025 December 31, 2024 4.625 % Senior Notes $ 460,038 $ 460,038 1.75 % Convertible Notes 149,109 149,109 3.625 % Convertible Notes 263,147 263,147 Total Notes 872,294 872,294 Credit Agreement — — Less: Unamortized discount ( 4,637 ) ( 5,676 ) Deferred issuance costs (1) ( 1,720 ) ( 2,336 ) Total long-term debt $ 865,937 $ 864,282 (1) Includes $ 0.6 million and $ 0.7 million of carrying amount of deferred issuance costs on the 4.625 % Senior Notes as of September 30, 2025 and December 31, 2024, respectively, $ 0.5 million and $ 0.9 million of carrying amount of deferred issuance costs on the 1.75 % Convertible Notes as of September 30, 2025 and December 31, 2024, respectively, and $ 0.6 million and $ 0.7 million of carrying amount of deferred issuance costs on the 3.625 % Convertible Notes as of September 30, 2025 and December 31, 2024, respectively. -22- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued As of September 30, 2025, $ 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, 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, including acquisitions and the repurchase or redemption of other outstanding indebtedness. These 4.625 % Senior Notes bear interest at a rate of 4.625 % per annum, payable semi-annually in arrears on April 15 and October 15 of each year, and payments commenced on April 15, 2021. The 4.625 % Senior Notes mature on October 15, 2030, and are senior unsecured obligations of the Company which are guaranteed, jointly and severally, on an unsecured basis by certain of the Company’s existing and future domestic direct and indirect wholly-owned subsidiaries (collectively, the “Guarantors”). If the Company or any of its restricted subsidiaries acquires or creates a domestic restricted subsidiary, other than an Insignificant Subsidiary (as defined in the indenture pursuant to which the 4.625 % Senior Notes were issued (the “Indenture”)), after the issue date, or any Insignificant Subsidiary ceases to fit within the definition of Insignificant Subsidiary, such restricted subsidiary is required to unconditionally guarantee, jointly and severally, on an unsecured basis, the Company’s obligations under the 4.625 % Senior Notes. The Company may redeem some or all of the 4.625 % Senior Notes at any time on or after October 15, 2025 at specified redemption prices plus accrued and unpaid interest, if any, up to, but excluding the redemption date. In addition, at any time prior to October 15, 2025, the Company was permitted to redeem some or all of the 4.625 % Senior Notes at a price equal to 100 % of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, plus an applicable “make-whole” premium. The discount and deferred issuance costs are being amortized, at an effective interest rate of 4.7 %, to interest expense through the maturity date. The Indenture contains covenants that restrict the Company’s ability to (i) pay dividends or make distributions on the Company’s common stock or repurchase the Company’s capital stock; (ii) make certain restricted payments; (iii) create liens or enter into sale and leaseback transactions; (iv) enter into transactions with affiliates; (v) merge or consolidate with another company; and (vi) transfer and sell assets. 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. 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, 2025. Cumulatively as of September 30, 2025, 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, 2025 and September 30, 2024. 1.75 % Convertible Notes On November 15, 2019, the Company issued $ 550.0 million aggregate principal amount of 1.75 % convertible senior notes due November 1, 2026 (the “ 1.75 % Convertible Notes”). The Company received proceeds of $ 537.1 million in cash, net of purchasers’ discounts and commissions and other debt issuance costs. A portion of the net proceeds were used to pay off all amounts outstanding under the then-existing Credit Facility. The 1.75 % Convertible Notes bear interest at a rate of 1.75 % per annum, payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2020. The 1.75 % Convertible Notes will mature on November 1, 2026, unless earlier converted or repurchased. 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. 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, 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: (i) during any calendar quarter commencing after the calendar quarter ending on March 31, 2020 (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 -23- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued consecutive trading days ending on, and including, the last trading day of the immediately preceding the calendar quarter is greater than 130 % of the applicable conversion price of the 1.75 % 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 1.75 % Convertible Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on each such trading day; or (iii) upon the occurrence of specified corporate events. On or after 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. 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, 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 September 30, 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 in the aggregate), 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), 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. The 1.75 % Convertible Notes are the Company’s general senior unsecured obligations and rank: (i) senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the 1.75 % Convertible Notes; (ii) equal in right of payment to the Company’s existing and future indebtedness that is not so subordinated; (iii) effectively junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and (iv) structurally junior to all existing and future indebtedness and other liabilities incurred by the Company’s subsidiaries. The following table provides the components of interest expense related to the 1.75 % Convertible Notes (in thousands): Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Contractual interest expense $ 652 $ 964 $ 1,957 $ 5,777 Amortization of discount and deferred issuance costs 125 185 373 1,128 Total interest expense related to 1.75 % Convertible Notes $ 777 $ 1,149 $ 2,330 $ 6,905 3.625 % Convertible Notes On July 16, 2024, the Company issued $ 263.1 million in aggregate principal amount of 3.625 % Convertible Notes due 2028 (the “ 3.625 % Convertible Notes”) and paid an aggregate of approximately $ 135.0 million in cash in exchange for approximately $ 400.9 million in aggregate principal amount of the Company’s 1.75 % Convertible Notes (collectively, the “Exchange Transaction”) pursuant to separate, privately negotiated exchange agreements with certain holders of the 1.75 % Convertible Notes. The Exchange Transaction was accounted for as a debt modification, and accordingly, no gain or loss was recognized. In connection with the Exchange Transaction, the Company recognized an increase in the fair value of the conversion feature of the 3.625 % Convertible Notes compared to the fair value of the conversion feature of the 1.75 % Convertible Notes of $ 4.0 million, partially offset by an increase to deferred tax liabilities of $ 1.0 million, which is included in ‘Additional paid-in capital’ on the 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 to interest expense through the maturity date, at an effective interest rate of 4.2 %. -24- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued The 3.625 % Convertible Notes bear interest at a rate of 3.625 % per annum on the principal amount thereof, payable semi-annually in arrears on September 1 and March 1 of each year, beginning on March 1, 2025, to the noteholders of record of the 3.625 % Convertible Notes as of the close of business on the immediately preceding August 15 and February 15, respectively. The 3.625 % Convertible Notes will mature on March 1, 2028, unless earlier converted or repurchased. The 3.625 % Convertible Notes can be settled in cash, the Company’s common stock at an initial conversion rate of $ 100 per share, or a combination of cash and the Company’s common stock, at the Company’s election. Holders may surrender their 3.625 % Convertible Notes for conversion at any time prior to the close of business on the business day immediately preceding December 1, 2027 only under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on September 30, 2024 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the applicable conversion price of the 3.625 % Convertible Notes on each such applicable trading day; (ii) during the 5 business day period following any 10 consecutive trading day period in which the trading price per $1,000 principal amount of 3.625 % Convertible Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on each such trading day; or (iii) upon the occurrence of specified corporate events. On or after December 1, 2027, and prior to the close of business on the business day immediately preceding the maturity date, holders may convert all or any portion of their notes at any time, regardless of the foregoing circumstances, at an initial conversion rate of 10 shares of the Company’s common stock per $1,000 principal amount of 3.625 % Convertible Notes. The Company will settle conversions of the 3.625 % Convertible Notes by paying or delivering, as the case may be, cash, shares of the Company’s common stock or a combination thereof at the Company’s election. 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, 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 September 30, 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. The Company may not redeem the 3.625 % Convertible Notes prior to the maturity date, and no sinking fund is provided for the 3.625 % Convertible Notes. The 3.625 % Convertible Notes are the Company’s general senior unsecured obligations and rank: (i) senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the 3.625 % Convertible Notes; (ii) equal in right of payment to the Company’s existing and future indebtedness that is not so subordinated; (iii) effectively junior to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and (iv) structurally junior to all existing and future indebtedness and other liabilities incurred by the Company’s subsidiaries. -25- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued The following table provides the components of interest expense related to the 3.625 % Convertible Notes (in thousands): Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Coupon interest expense $ 2,385 $ 1,987 $ 7,154 $ 1,987 Amortization of discount and debt issuance costs 323 258 958 258 Total interest expense related to 3.625 % Convertible Notes $ 2,708 $ 2,245 $ 8,112 $ 2,245 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 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 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. 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. The Credit Agreement also contains restrictive covenants that limit, among other things, the Company’s and its restricted subsidiaries’ ability to incur additional indebtedness, create, incur or assume liens, consolidate, merge, liquidate or dissolve, pay dividends or make other distributions or other restricted payments, make or hold certain investments, enter into certain transactions with affiliates, sell assets other than on terms specified by the Credit Agreement, amend the terms of certain other indebtedness and organizational documents, and change their lines of business and fiscal years, in each case, subject to customary exceptions. 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, 2025. As of September 30, 2025 and December 31, 2024, availability under the Credit Agreement was $ 348.8 million and $ 348.9 million, respectively, net of letters of credit. -26- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued 8. Commitments and Contingencies Commitments 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. The Company also has revenue sharing arrangements with annual minimum guarantees based upon third-party website advertising metrics and other contractual provisions. Litigation From time to time, the Company and its affiliates are involved in litigation and other legal disputes or regulatory inquiries that arise in the ordinary course of business. Any claims or regulatory actions against the Company and its affiliates, whether meritorious or not, could be time consuming and costly, and could divert significant operational resources. The outcomes of such matters are subject to inherent uncertainties, carrying the potential for unfavorable rulings that could include monetary damages and injunctive relief. On June 13, 2025, a putative class action captioned John Milito v. Ookla, LLC, et al., 25-2-17772-6 SEA , was filed against certain subsidiaries of the Company in the Superior Court of the State of Washington, King County, alleging that subsidiaries of the Company posted certain job openings without disclosing either wage scales or salary ranges in violation of Washington law and seeking statutory damages, interest, attorney’s fees, expenses, and costs of suit, as well as injunctive and other relief. On December 17, 2024, a putative class action captioned Dawn Fregosa v. Mashable, Inc., 24CV103566 , was filed against Mashable, Inc., a subsidiary of the Company, in the Superior Court of the State of California for the County of Alameda. The complaint alleges that the Mashable website uses third-party “trackers” in violation of the California Invasion of Privacy Act and seeks statutory damages, interest, attorney’s fees, expenses, and costs of suit. On February 3, 2025, Mashable removed the action to the United States District Court for the Northern District of California, case number 25-cv-01094. On April 10, 2025, the court granted Mashable’s motion to dismiss the first amended complaint with leave to amend. On October 9, 2025, the court denied Mashable’s motion to dismiss the second amended complaint. On June 18, 2024, a putative class action captioned Joseph Josue v. IGN Entertainment, Inc., 24-cv-11579 , was filed against IGN Entertainment, Inc., a subsidiary of the Company, in United States District Court for the District of Massachusetts. The complaint alleges that IGN disclosed to third parties the titles and URLs of the videos that plaintiff viewed on the IGN website in violation of the Video Privacy Protection Act. The complaint seeks statutory damages, punitive damages, interest, attorney’s fees, expenses, and costs of suit. On July 10, 2025, the court denied IGN’s motion to dismiss the first amended complaint. The Company does not believe, based on current knowledge, that any such legal proceedings or claims, after giving effect to any existing accrued liabilities for such legal proceedings or claims, are likely to have a material adverse effect on the Company’s overall consolidated financial position, results of operations, or cash flows. However, depending on the amount and timing, an unfavorable resolution of some or all of these matters could have a material effect on the Company’s consolidated financial position, results of operations, or cash flows in a particular period. Although the Company cannot predict the outcome of legal or other proceedings with certainty, where there is at least a reasonable possibility that a loss may be incurred, GAAP requires us to disclose an estimate of the reasonably possible loss or 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. Due to the uncertainty of the pending litigation discussed above, the Company cannot currently reasonably estimate the amount of any possible loss or range of loss relating to such claims. 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. It is the Company’s policy to expense as incurred legal fees related to various litigations. -27- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued Non-Income Related Taxes The Company does not collect and remit sales and use, telecommunication, or similar taxes and fees in certain jurisdictions where the Company believes such taxes are not applicable or legally required. Several states and other taxing jurisdictions have presented or threatened the Company with assessments, alleging that the Company is required to collect and remit such taxes there. The Company is currently under audit or is subject to audit for indirect taxes in various states, municipalities, and foreign jurisdictions. The Company recognizes a liability for these matters when it is probable that an obligation exists and the amount can be reasonably estimated based on all relevant information that is available at each reporting period. The Company established reserves for these matters of $ 23.4 million and $ 25.2 million as of September 30, 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 on our financial results. However, as of September 30, 2025 any potential loss or range of loss was not estimable. 9. Income Taxes 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 139.8 % and ( 34.9 )% for the three months ended September 30, 2025 and 2024, respectively, and 42.2 % and 149.0 % for the nine months ended September 30, 2025 and 2024, respectively. The Company’s effective tax rate for the three and nine months ended September 30, 2025 was disproportionally impacted by the goodwill impairment of $ 17.6 million related to the reassessment of the fair value of one reporting unit within the Cybersecurity & Martech reportable segment, for which no corresponding tax benefit was recorded since it is entirely related to the excess financial statement goodwill with no tax basis. The effective tax rate was further impacted by a tax shortfall related to share-based compensation, changes in the valuation allowance against its U.S. capital loss carryforwards and remeasurement of reserves for uncertain tax positions. During the three months ended September 30, 2025, the Company recorded an additional valuation allowance against its U.S. capital loss carryforwards which resulted in a discrete tax expense of $ 3.8 million and a remeasurement of the reserve for uncertain tax positions, which resulted in a discrete tax expense of $ 1.1 million. During the nine months ended September 30, 2025, the Company recognized a discrete tax expense of $ 2.1 million related to the vesting of share-based compensation resulting in a tax shortfall, a $ 1.1 million discrete tax expense on the remeasurement of reserves for uncertain tax positions, and a net $ 0.5 million discrete tax expense related to changes to its valuation allowance against U.S. capital loss carryforwards. 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 Technology & Shopping 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. S. capital loss carryforwards, which resulted in a discrete tax charge of $ 2.5 million. As of September 30, 2025 and December 31, 2024, the Company had $ 8.9 million and zero , respectively, for uncertain income tax positions in ‘Other current liabilities’ on the Condensed Consolidated Balance Sheets. As of September 30, 2025 and December 31, 2024, the Company had $ 24.2 million and $ 30.3 million, respectively, for uncertain income tax positions in ‘Other noncurrent liabilities’ 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. 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 $ 18.3 million and $ 6.4 million as of September 30, 2025 and December 31, 2024, respectively. 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 -28- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued Company currently does not expect the OBBBA to have a material impact on its effective tax rate but expects 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. 10. Stockholders’ Equity On August 6, 2020, the Company’s Board of Directors (the “Board”) approved a program authorizing the repurchase of up to ten million shares of the Company’s common stock through August 6, 2025 (the “2020 Program”). The Company entered into certain Rule 10b5-1 trading plans to execute repurchases under the 2020 Program. On August 2, 2024, the Board authorized (i) an increase in its 2020 Program pursuant to which the Company may purchase up to an additional five million shares of the Company’s common stock (the “Additional Authorization”) and (ii) an extension of the expiration date of the share repurchase program from August 6, 2025 to August 2, 2029. As a result of the Additional Authorization, the aggregate number of shares of the Company’s common stock authorized for repurchase under the 2020 Program increased from up to ten million to up to 15 million shares of the Company’s common stock. During the three and nine months ended September 30, 2025, the Company repurchased 1,176,559 and 3,011,405 shares, respectively, under the 2020 Program at an aggregate cost of approximately $ 43.7 million and $ 109.9 million, respectively (including excise tax). 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). Cumulatively as of September 30, 2025, 11,770,097 shares were repurchased under the 2020 Program, at an aggregate cost of $ 693.5 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 September 30, 2025 was 3,229,903 shares. On April 24, 2025, the Company repurchased 143,161 shares of its common stock at an aggregate value of approximately $ 4.4 million in connection with the sale of its minority equity ownership interest in OpenEvidence. The repurchase transaction had a non-cash nature and involved our common stock that was issued in 2023 as partial consideration for the acquisition of a minority equity ownership interest in OpenEvidence. Refer to Note 4 - Investments and Note 14 - Supplemental Cash Flow Information for further information. 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 vesting of restricted stock. During the three months ended September 30, 2025 and 2024, the Company purchased and retired 926 and 2,464 shares, respectively, at an aggregate cost of less than $ 0.1 million and $ 0.1 million, respectively, from plan participants for this purpose. During the nine months ended September 30, 2025 and 2024, the Company purchased and retired 107,809 and 62,054 shares, respectively, at an aggregate cost of approximately $ 4.5 million and $ 4.1 million, respectively, from plan participants for this purpose. -29- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued 11. Share-Based Compensation The Company’s share-based compensation plans include the Ziff Davis, Inc. 2024 Equity Incentive Plan (the “2024 Plan”), the 2015 Stock Option Plan (the “2015 Plan”), and 2001 Employee Stock Purchase Plan (the “Purchase Plan”). Collectively, the 2015 Plan and 2024 Plan are referred to herein as the “Plans.” As of September 30, 2025, 435,135 shares underlying options and 2,153,431 restricted stock units were outstanding under the Plans. As of September 30, 2025, there were 1,926,382 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 the effects of share-based compensation expense in the Condensed Consolidated Statements of Operations during the periods presented (in thousands): Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Direct costs $ 72 $ 68 $ 203 $ 191 Sales and marketing 1,320 1,014 3,655 2,865 Research, development, and engineering 935 769 2,662 2,930 General, administrative, and other related costs (1) 9,870 8,310 27,156 24,647 Total share-based compensation expense $ 12,197 $ 10,161 $ 33,676 $ 30,633 (1) Includes expense of $ 0.1 million related to liability classified awards issued to non-employees of the Company for the three and nine months ended September 30, 2025, 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. 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 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 752,246 and 394,994 restricted stock units (excluding market-based awards discussed below) (“RSUs”) during the nine months ended September 30, 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 a 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 the market index achieving the relative TSR targets. 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 of PSUs granted during the nine months ended September 30, 2025 and 2024 was $ 38.80 and $ 87.17 , respectively. -30- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued 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, 2025 2024 Underlying stock price at valuation date $ 38.19 $ 66.88 Expected volatility 34.5 % 32.9 % Risk-free interest rate 3.9 % 4.3 % Restricted stock award (“RSA”) and PSA activity for the nine months ended September 30, 2025 is set forth below: RSAs PSAs Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Nonvested at January 1, 2025 54,829 $ 68.97 163,181 $ 36.27 Granted — $ — — $ — Vested ( 27,632 ) $ 68.97 — $ — Forfeited — $ — — $ — Nonvested at September 30, 2025 27,197 $ 68.97 163,181 $ 36.27 RSU and PSU activity for the nine months ended September 30, 2025 is set forth below: RSUs PSUs Number of Shares Weighted Average Grant Date Fair Value Number of Shares (1) Weighted Average Grant Date Fair Value Outstanding at January 1, 2025 652,227 $ 74.59 520,986 $ 82.73 Granted 752,246 $ 37.23 598,676 $ 38.80 Vested ( 249,811 ) $ 73.28 ( 23,477 ) $ 78.73 Forfeited ( 42,415 ) $ 55.83 ( 55,001 ) $ 58.90 Outstanding at September 30, 2025 1,112,247 $ 50.33 1,041,184 $ 58.19 (1) Represents the number of shares at 100% achievement. As of September 30, 2025, share-based compensation cost of $ 0.5 million is expected to be recognized over a weighted-average period of 0.3 years for RSAs, share-based compensation cost of $ 39.7 million is expected to be recognized over a weighted-average period of 2.0 years for RSUs, and share-based compensation cost of $ 25.7 million is expected to be recognized over a weighted-average period of 2.0 years for PSUs. Share based compensation cost for PSAs is fully recognized, -31- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued 12. Earnings Per Share The components of basic and diluted earnings per share are as follows (in thousands, except share and per share data): Three months ended September 30, 2025 2024 Basic Diluted Basic Diluted Numerator for basic and diluted net loss per common share: Net loss $ ( 3,598 ) $ ( 3,598 ) $ ( 48,577 ) $ ( 48,577 ) Plus: Convertible Notes interest expense (after-tax) — — — — Net loss available to the Company’s common shareholders $ ( 3,598 ) $ ( 3,598 ) $ ( 48,577 ) $ ( 48,577 ) Denominator: Basic weighted-average outstanding shares of common stock 40,558,629 40,558,629 43,924,158 43,924,158 Dilutive effect of: Equity incentive plans — — — — Convertible debt — — — — Diluted weighted-average outstanding shares of common stock 40,558,629 40,558,629 43,924,158 43,924,158 Net loss per share $ ( 0.09 ) $ ( 0.09 ) $ ( 1.11 ) $ ( 1.11 ) Nine months ended September 30, 2025 2024 Basic Diluted Basic Diluted Numerator for basic and diluted net loss per common share: Net income (loss) $ 46,984 $ 46,984 $ ( 1,040 ) $ ( 1,040 ) Plus: Convertible Notes interest expense (after-tax) — — — — Net income (loss) available to the Company’s common shareholders $ 46,984 $ 46,984 $ ( 1,040 ) $ ( 1,040 ) Denominator: Basic weighted-average outstanding shares of common stock 41,609,182 41,609,182 45,088,272 45,088,272 Dilutive effect of: Equity incentive plans — 75,967 — — Convertible debt — — — — Diluted weighted-average outstanding shares of common stock 41,609,182 41,685,149 45,088,272 45,088,272 Net income (loss) per share $ 1.13 $ 1.13 $ ( 0.02 ) $ ( 0.02 ) For the three months ended September 30, 2025 and 2024, there were 2,778,944 and 1,879,840 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 and average stock price during the 2025 and 2024 periods, respectively. For the nine months ended September 30, 2025 and 2024, there were 848,420 and 1,879,840 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 and due to the net loss during 2024, respectively. For the three months ended September 30, 2025 and 2024, 4,029,861 and 4,213,808 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. For the nine months ended September 30, 2025 and 2024, 4,029,861 and 5,406,679 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. -32- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued 13. Segment Information The Company’s businesses are based on the organizational structure used by the chief operating decision maker (“CODM”). 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 September 30, Nine months ended September 30, 2025 2024 2025 2024 Revenue by reportable segment: Technology & Shopping $ 85,189 $ 87,126 $ 247,655 $ 228,960 Gaming & Entertainment 47,578 49,714 131,830 129,335 Health & Wellness 102,306 90,771 287,544 256,737 Connectivity 57,179 55,943 170,405 159,372 Cybersecurity & Martech 71,459 70,026 207,122 214,461 Total segment revenues 363,711 353,580 1,044,556 988,865 Corporate — — — — Total revenues $ 363,711 $ 353,580 $ 1,044,556 $ 988,865 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. -33- 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 September 30, 2025 Technology & Shopping Gaming & Entertainment Health & Wellness Connectivity Cybersecurity & Martech Total operating costs and expenses Salaries, benefits, and other employee expenses $ 32,946 $ 10,365 $ 30,012 $ 15,278 $ 17,148 $ 105,749 Cloud computing, software, and other related expenses 6,641 2,090 4,456 4,660 11,069 28,916 Advertising and marketing related expenses 11,692 3,604 10,897 590 4,583 31,366 Partner payments 628 8,231 11,147 132 5,943 26,081 Professional and other third-party services 6,096 1,374 2,308 5,488 5,547 20,813 Goodwill impairment — — — — 17,579 17,579 Depreciation and amortization 22,599 2,949 13,406 7,116 11,121 57,191 Other 4,539 (1) 4,277 (2) 7,222 (3) 7,459 (4) 4,894 (5) 28,391 Total segment operating costs and expenses 85,141 32,890 79,448 40,723 77,884 316,086 Corporate (6) 19,197 Total operating costs and expenses $ 335,283 -34- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued Three months ended September 30, 2024 Technology & Shopping Gaming & Entertainment Health & Wellness Connectivity Cybersecurity & Martech Total operating costs and expenses Salaries, benefits, and other employee expenses $ 31,653 $ 11,429 $ 28,211 $ 13,268 $ 17,516 $ 102,077 Cloud computing, software, and other related expenses 6,928 1,630 3,303 3,871 9,473 25,205 Advertising and marketing related expenses 11,043 3,702 10,144 302 6,168 31,359 Partner payments 2,043 6,286 9,911 249 5,392 23,881 Professional and other third-party services 4,342 1,643 2,132 3,754 3,952 15,823 Goodwill impairment 85,273 — — — — 85,273 Depreciation and amortization 20,333 2,632 12,505 7,868 7,978 51,316 Other 4,126 (1) 7,348 (2) 6,318 (3) 5,818 (4) 4,656 (5) 28,266 Total segment operating costs and expenses 165,741 34,670 72,524 35,130 55,135 363,200 Corporate (6) 19,684 Total operating costs and expenses $ 382,884 Nine months ended September 30, 2025 Technology & Shopping Gaming & Entertainment Health & Wellness Connectivity Cybersecurity & Martech Total operating costs and expenses Salaries, benefits, and other employee expenses $ 102,522 $ 32,339 $ 85,961 $ 43,584 $ 51,896 $ 316,302 Cloud computing, software, and other related expenses 20,237 6,058 12,796 13,083 31,275 83,449 Advertising and marketing related expenses 36,445 10,913 30,806 2,874 13,975 95,013 Partner payments 2,140 22,296 33,031 590 17,450 75,507 Professional and other third-party services 17,993 4,192 7,602 14,851 14,777 59,415 Goodwill impairment — — — — 17,579 17,579 Depreciation and amortization 68,053 8,621 40,705 21,768 31,329 170,476 Other 12,124 (1) 12,694 (2) 20,805 (3) 18,883 (4) 11,708 (5) 76,214 Total segment operating costs and expenses 259,514 97,113 231,706 115,633 189,989 893,955 Corporate (6) 53,560 Total operating costs and expenses $ 947,515 -35- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued Nine months ended September 30, 2024 Technology & Shopping Gaming & Entertainment Health & Wellness Connectivity Cybersecurity & Martech Total operating costs and expenses Salaries, benefits, and other employee expenses $ 93,278 $ 33,249 $ 85,194 $ 39,570 $ 55,526 $ 306,817 Cloud computing, software, and other related expenses 21,125 4,038 10,298 11,168 29,499 76,128 Advertising and marketing related expenses 33,074 10,511 29,242 2,453 17,018 92,298 Partner payments 6,015 19,833 26,239 693 15,454 68,234 Professional and other third-party services 12,572 4,532 6,609 10,068 13,123 46,904 Depreciation and amortization 58,111 7,865 38,917 22,485 24,520 151,898 Other 12,829 (1) 15,550 (2) 20,089 (3) 11,061 (4) 13,455 (5) 72,984 Total segment operating costs and expenses 322,277 95,578 216,588 97,498 168,595 900,536 Corporate (6) 53,203 Total operating costs and expenses $ 953,739 (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. -36- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued Information on income (loss) from operations is set forth in the table below (in thousands). Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Income (loss) from operations by reportable segment: Technology & Shopping $ 48 $ ( 78,615 ) $ ( 11,859 ) $ ( 93,317 ) Gaming & Entertainment 14,688 15,044 34,717 33,757 Health & Wellness 22,858 18,247 55,838 40,149 Connectivity 16,456 20,813 54,772 61,874 Cybersecurity & Martech ( 6,425 ) 14,891 17,133 45,866 Total segment operating income 47,625 ( 9,620 ) 150,601 88,329 Corporate (1) ( 19,197 ) ( 19,684 ) ( 53,560 ) ( 53,203 ) Income (loss) from operations $ 28,428 $ ( 29,304 ) $ 97,041 $ 35,126 (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 September 30, Nine months ended September 30, 2025 2024 2025 2024 Capital expenditures: Technology & Shopping $ 4,146 $ 3,343 $ 11,746 $ 10,732 Gaming & Entertainment 1,776 1,013 6,180 3,446 Health & Wellness 10,010 9,125 29,733 26,796 Connectivity 7,799 5,804 20,176 19,040 Cybersecurity & Martech 6,213 6,267 17,433 19,181 Total from reportable segments 29,944 25,552 85,268 79,195 Corporate 192 291 620 281 Total capital expenditures $ 30,136 $ 25,843 $ 85,888 $ 79,476 14. Supplemental Cash Flow Information Non-cash investing and financing activities were as follows (in thousands): Nine months ended September 30, 2025 2024 Non-cash investing activity: Property and equipment, accrued but unpaid $ — $ — Right-of-use assets acquired in exchange for operating lease obligations $ 340 $ 1,035 Sale of equity investments for common stock (1) $ 4,448 $ — Non-cash financing activity: Increase in fair value of conversion feature on 3.625 % Convertible Notes $ — $ 4,001 Excise tax on share repurchases $ 984 $ 1,797 (1) Represents 143,161 shares received in connection with the sale of our minority equity ownership interest in OpenEvidence during the nine months ended September 30, 2025. -37- ZIFF DAVIS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued Supplemental data (in thousands): Nine months ended September 30, 2025 2024 Interest paid $ 22,675 $ 16,912 Income taxes paid, net of refunds $ 46,067 $ 49,660 15. Accumulated Other Comprehensive Loss The following table summarizes the changes in accumulated other comprehensive income (loss) income, net of tax, for the three months ended September 30, 2025 (in thousands): Unrealized Gains on Investments Foreign Currency Translation Total Balance as of July 1, 2025 $ 2,671 $ ( 54,390 ) $ ( 51,719 ) Other comprehensive income, net of tax ( 2,650 ) ( 4,405 ) ( 7,055 ) Balance as of September 30, 2025 $ 21 $ ( 58,795 ) $ ( 58,774 ) The following table summarizes the changes in accumulated other comprehensive income (loss) income, net of tax, for the nine months ended September 30, 2025 (in thousands): Unrealized Gains on Investments Foreign Currency Translation Total Balance as of January 1, 2025 $ 2,112 $ ( 84,583 ) $ ( 82,471 ) Other comprehensive income, net of tax ( 2,091 ) 25,788 23,697 Balance as of September 30, 2025 $ 21 $ ( 58,795 ) $ ( 58,774 ) During the three and nine months ended September 30, 2025 we reclassified $ 2.7 million, net of tax, out of accumulated other comprehensive loss, representing the excess of unrealized losses over the provision for credit losses on the corporate debt security. See Note 4 – Investments for further details. There were no reclassifications out of accumulated other comprehensive loss during the three and nine months ended September 30, 2024. -38-