Executive Summary

Q1 2025 revenue was $328.6M, up 4.5% YoY and above consensus; Adjusted diluted EPS was $1.14, slightly below consensus, while Adjusted EBITDA was ~$100.2M, essentially in line with internal targets .
The company reaffirmed full-year 2025 guidance (Revenue $1.442–$1.502B, Adjusted EBITDA $505–$542M, Adjusted diluted EPS $6.64–$7.28), signaling confidence in accelerating growth into Q2 and H2 .
Four of five segments grew; Tech & Shopping (+17.9% revenue, ~44% Adj. EBITDA growth) led performance, while Cybersecurity & Martech (-10.8% revenue) declined due to prior-year timing effects; ad markets were strong across Tech, Gaming, and Health .
Free cash flow was -$5.0M due to seasonal working capital usage at TDS Gift Cards; management remains active on buybacks (~$34.9M in Q1) and M&A (two Q1 acquisitions closed, pipeline robust), and highlighted a low net leverage profile (gross leverage ~1.8x TTM Adj. EBITDA) as a catalyst for capital deployment .

What Went Well and What Went Wrong

What Went Well

Tech & Shopping revenue +17.9% with ~44% Adj. EBITDA growth; margin expansion at CNET and “shrink-to-grow” in B2B drove bottom-line strength. “We’re pleased with our first quarter results…accelerating revenue growth, a healthy M&A cadence, and our active share buyback program” — Vivek Shah, CEO .
Health & Wellness revenue +7.3% and Adj. EBITDA +12% YoY, with a strong pharma upfront and subscription revenue reaching 15% of segment mix, supporting diversification priorities .
Connectivity revenue +5% with subscription and licensing +7% and industry-leading margins (>50%); WiFi 7 adoption seen as a reacceleration driver; Speedtest and Downdetector growth remained strong .

What Went Wrong

Cybersecurity & Martech revenue -10.8% YoY, reflecting timing benefits in the prior-year quarter; management expects sequential improvement and H2 growth aided by a small Q2 acquisition and stabilization of VPN .
Free cash flow -$5.0M vs $47.4M YoY, driven primarily by TDS Gift Cards working capital usage (operating cash flow $20.6M vs $75.6M YoY); Adjusted diluted EPS fell YoY (to $1.14 from $1.27) on higher net interest expense, higher D&A from 2024 capital allocation, and FX-related “other loss” .
Humble subscription lineup weaker in the quarter, modest drag in Gaming & Entertainment; management expects merchandising/IP improvements and possible tailwinds from Nintendo Switch 2 (June) to benefit the ad market .

Financial Results

Consolidated Actuals (YoY)

Metric	Q1 2024	Q1 2025
Revenue ($USD Millions)	$314.5	$328.6
GAAP Diluted EPS ($)	$0.23	$0.56
Adjusted EBITDA ($USD Millions)	$100.8	$100.2
Adjusted diluted EPS ($)	$1.27	$1.14

Consolidated Actuals (Sequential)

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$353.6	$412.8	$328.6
GAAP Diluted EPS ($)	$(1.11)	$1.43	$0.56
Adjusted EBITDA ($USD Millions)	$124.7	$171.8	$100.2
Adjusted diluted EPS ($)	$1.64	$2.58	$1.14

Q1 2025 vs. Wall Street Consensus (S&P Global)

Metric	Consensus	Actual
Revenue ($USD)	$322.76M*	$328.64M
Primary EPS ($)	$1.247*	$1.14
EBITDA ($USD)	$100.09M*	$100.18M (Adj. EBITDA)

Values retrieved from S&P Global*. Note: SPGI “EBITDA” may reflect a definition differing from company-reported Adjusted EBITDA; company discloses non-GAAP definitions and reconciliations in the press release .

Segment Revenue Breakdown (YoY)

Segment	Q1 2024 ($M)	Q1 2025 ($M)	YoY Change
Technology & Shopping	$69.3	$81.7	+17.9%
Gaming & Entertainment	$36.6	$38.0	+3.8%
Health & Wellness	$80.0	$85.8	+7.3%
Connectivity	$53.1	$55.8	+5.0%
Cybersecurity & Martech	$75.5	$67.3	-10.8%
Total	$314.5	$328.6	+4.5%

KPIs and Revenue Mix

KPI	Q1 2024	Q1 2025
Advertising & Performance Marketing Revenues ($M)	$156	$175
Subscription & Licensing Revenues ($M)	$149	$146

Segment (Ad & Perf Marketing)	Net Rev Retention	Customers	Avg Rev/Customer
Tech & Shopping (Q1 2024 → Q1 2025)	91.0% → 90.0%	575 → 573	$114,621 → $138,701
Gaming & Entertainment (Q1 2024 → Q1 2025)	89.0% → 92.2%	318 → 311	$71,561 → $78,362
Health & Wellness (Q1 2024 → Q1 2025)	94.0% → 94.9%	794 → 703	$79,629 → $94,652

Guidance Changes

Metric	Period	Previous Guidance (Feb 25, 2025)	Current Guidance (May 9, 2025)	Change
Revenue	FY 2025	$1.442B – $1.502B	$1.442B – $1.502B	Maintained
Adjusted EBITDA	FY 2025	$505M – $542M	$505M – $542M	Maintained
Adjusted diluted EPS	FY 2025	$6.64 – $7.28	$6.64 – $7.28	Maintained
Adjusted effective tax rate	FY 2025	23.25% – 25.25%	23.25% – 25.25%	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Ad market health	Q4: Ad & perf marketing +10.6% YoY; strong tech, gaming; B2B headwinds planned .	Q1: Ad revenue +12.3%; strength in Tech & Shopping, Health & Wellness, Gaming .	Improving, broad-based strength.
CNET integration	Q4: Ahead of plan; cost synergies realized; CNET Group branding at CES .	Q1: Margin expansion at CNET supported Tech & Shopping profitability .	Positive execution; margin tailwind.
Connectivity (Ookla/Ekahau)	Q4: Reorg to focus on subs/data; lumpy licensing; strong long-term prospects .	Q1: +5% revenue; >50% margins; WiFi 7 adoption expected to reaccelerate .	Reacceleration expected in 2025.
Gaming (Humble, IGN)	Q4: Humble publishing lumpy; slate shifted into 2025/2026; IGN strong .	Q1: Humble lineup weaker; expect better merchandising and IP; possible Switch 2 tailwind .	Near-term mixed; medium-term catalysts.
Cybersecurity & Martech	Q4: Multiyear improvement; expect H2 2025 growth .	Q1: -10.8% YoY on timing; expect H2 growth and VPN stabilization .	Recovery expected in H2.
AI/Generative search	Q4: AIO presence ~12%; limited aggregate CTR impact .	Q1: AIO presence ~20%+ of top queries; ~1/3 citations include ZD; 65% of revenue not traffic-dependent .	Monitoring; mitigated exposure.
Tariffs/macro	Q4: Assumed macro constant; watching inflation/tariffs .	Q1: No measurable tariff impact YTD; vertical-by-vertical insulation; RMN may benefit from higher consumer price-seeking .	Vigilant; limited impact to date.
Capital allocation (M&A, buybacks)	Q4: $225M M&A and $185M buybacks in 2024; capacity intact .	Q1: ~$39M M&A, ~$35M buybacks; plan to accelerate buybacks in Q2; active multi-vertical pipeline .	Active; opportunistic deployment.
Legal/IP (OpenAI)	Q4: Licensing must reflect fair value; patient posture .	Q1: Filed lawsuit to defend IP; aiming for fair compensation; confident in recent case developments .	Assertive IP defense; potential optionality.

Management Commentary

“Four of our 5 reportable segments grew in revenues…Tech & Shopping…adjusted EBITDA grew nearly 44%…simplified our B2B product offerings and reduced expenses in a shrink-to-grow approach that’s working.” — Vivek Shah .
“Connectivity…core subscription and licensing grew by 7%…margins…over 50%…we believe this will once again be a rule of 60-plus data services and software business.” — Vivek Shah .
“On capital allocation…we have bought 4.25 million shares…over the last 4 quarters…we will continue to lean into this dislocation.” — Vivek Shah .
“We intend to use our existing share repurchase authorization to accelerate our share repurchase activity in the second quarter while maintaining our robust balance sheet.” — Bret Richter .
“Our decision to file a lawsuit against OpenAI stems from a fundamental conviction to protect the core principles underpinning quality journalism…” — Vivek Shah .

Q&A Highlights

Ad market and pipeline: Broad strength across Tech, Gaming, Health; B2B intentionally reduced to improve margin; pharma upfronts “good,” supportive of Health & Wellness growth trajectory .
Connectivity priorities: Focused on WiFi/Ekahau tied to WAP cycles; expect WiFi 7 to drive enterprise demand; core Speedtest/Downdetector growing .
Tariffs impact: Direct exposure low; vertical analysis suggests insulation; RMN could benefit as consumers seek discounts amid potential price increases .
Generative AI/search: AIO present on a little over 20% of top queries; ~35% of revenues traffic-dependent and ~40% of that from search; ~1/3 AIOs cite ZD; programmatic only ~3% of total revenue by design .
Capital allocation posture: Active M&A across five segments and continued buybacks; disciplined on price and leverage; valuations in digital media attractive amid market “fears” .

Estimates Context

Revenue beat: $328.64M actual vs $322.76M consensus — modest beat driven by strong advertising and resilient subscription/license in core assets (Speedtest/Downdetector) .
EPS miss: $1.14 Adjusted diluted EPS actual vs $1.247 “Primary EPS” consensus — slight miss attributed to higher net interest expense, higher D&A tied to 2024 capital allocation, and FX in “other loss” .
EBITDA: Company Adjusted EBITDA $100.18M; SPGI “EBITDA” consensus $100.09M reflects differing definitions; use company non-GAAP for comparability .
Values retrieved from S&P Global*.

Where estimates may adjust:

Ad strength and reaffirmed FY guide likely support modest upward revenue revisions; EPS revisions depend on Q2 margin trajectory and interest expense profile (management expects Q2 margins similar to or slightly below prior year given investment spend and dilutive early-stage acquisitions) .

Key Takeaways for Investors

Revenue outperformed consensus with broad-based ad strength; slight EPS miss driven by transitory cost/FX factors — near-term sentiment likely tied to Q2 growth acceleration and margin delivery .
Reaffirmed FY guidance and commentary on Q2 sequential improvement support a constructive setup; watch for execution in Connectivity (WiFi 7 cycle) and Health pharma bookings .
Tech & Shopping margin expansion (CNET integration, B2B repositioning) is a key bottom-line driver; sustained performance here underpins FY EPS trajectory .
Cybersecurity & Martech headwinds are largely timing-related; management expects H2 improvement and VPN stabilization — monitor sequential trends and small Q2 acquisition impact .
Capital deployment is active and opportunistic: buybacks set to accelerate in Q2 and M&A across all segments; low net leverage affords flexibility and potential EPS accretion .
Free cash flow seasonality (TDS) explains Q1 headwind; full-year FCF generation remains a core pillar of the equity story (2024 FCF $283.7M) .
Legal/IP stance (OpenAI suit) defends monetization of content; outcome could unlock licensing value and mitigate long-term search/AI risks .

ZIFF DAVIS, INC. (ZD)·Q1 2025 Earnings Summary