Ziff Davis, Inc.

Company Overview

Business Model: Ziff Davis, Inc. is a vertically focused digital media and internet company that operates a portfolio of leading brands across technology, shopping, gaming and entertainment, health and wellness, connectivity, cybersecurity, and martech. The Company's primary revenue streams are derived from advertising and performance marketing (including online display/video advertising, lead generation, and commissions from online merchants) and subscription and licensing services (cloud-based subscriptions, usage-based fees, perpetual software licenses, and intellectual property licensing). Additional revenues are generated from hardware sales, online courses, and game publishing.

Market Position: Ziff Davis, Inc. holds leading positions in its diverse verticals, leveraging trusted brands and authoritative content. Key assets include IGN Entertainment, recognized as one of the world's largest gaming and entertainment media platforms, and PCMag, whose "Editor’s Choice" award is globally recognized. Ookla provides comprehensive insights into worldwide internet performance, and RootMetrics is an industry leader in mobile service provider benchmarking. The Company's competitive advantages stem from its brand reputation, ability to attract diverse audiences and advertisers, effective marketing solutions, multiple monetization methods, financial stability, service reliability, intellectual property ownership, customer support, ease-of-use, scalability, and global reach.

Recent Strategic Developments: Ziff Davis, Inc. employs a programmatic mergers and acquisitions (M&A) strategy to drive growth, having deployed approximately $3.3 billion on over 90 acquisitions globally between 2012 and 2024. In 2024, the Company completed four acquisitions, including TDS Gift Cards, a digital gifting and branded payments platform, and CNET Media, Inc., a digital media publication platform. Total consideration for 2024 acquisitions amounted to $365.0 million, or $219.0 million net of cash acquired. In a strategic capital structure move, the Company issued $263.1 million in new 3.625% Convertible Notes due 2028 and paid approximately $135.0 million in cash to exchange approximately $400.9 million of its existing 1.75% Convertible Notes.

Geographic Footprint: Ziff Davis, Inc. maintains a global operational presence with approximately 3,800 employees as of December 31, 2024, of which 56% are U.S.-based and 44% are non-U.S.-based. The Company operates smaller leased offices across Asia, North America, Europe, and Australia. Key operational countries include the U.S., Canada, Ireland, the United Kingdom, India, and other international markets. In 2024, the United States accounted for $1,165.6 million (83.2%) of total revenues, while all other countries contributed $236.1 million (16.8%). Long-lived assets are primarily concentrated in the United States ($178.7 million) with $44.7 million in all other countries as of December 31, 2024.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: 85.7%
• Operating Margin: 8.1%
• Net Margin: 4.5%

Investment in Growth:

• R&D Expenditure: $67.4 million (4.8% of revenue)
• Capital Expenditures: $106.6 million
• Strategic Investments: The Company deployed $365.0 million in total consideration for four business acquisitions in 2024, with $219.0 million net of cash acquired. These acquisitions contributed $83.2 million in incremental revenue during 2024.

Business Segment Analysis

Technology & Shopping

Financial Performance:

• Revenue: $361.9 million (+9.5% YoY)
• Operating Margin: -19.6%
• Key Growth Drivers: A $34.9 million increase in advertising and performance marketing revenues, primarily driven by a $32.3 million increase in the technology business due to an acquisition in 2024.

Product Portfolio:

• Technology: CNET, PCMag, Mashable, Lifehacker, Spiceworks, ZDNET (online publishers, product reviews, news, buying guides, IT decision-maker content).
• Shopping: RetailMeNot, Offers.com, BlackFriday.com, TheBlackFriday.com, BestBlackFriday.com, DealsofAmerica.com (savings and discount platforms).
• Services: TDS Gift Cards (gift card processing, program management, marketing).

Market Dynamics: Influences consumer purchase decisions through authoritative content and savings opportunities, connecting retail partners with consumer shopping audiences. Operates one of the longest-running independent testing facilities for consumer technology products.

Gaming & Entertainment

Financial Performance:

• Revenue: $180.3 million (+6.8% YoY)
• Operating Margin: 30.0%
• Key Growth Drivers: A $6.7 million increase in advertising and performance marketing revenues, partly due to an acquisition in 2024, and a $4.7 million increase in subscription and licensing revenues from Humble Bundle properties.

Product Portfolio:

• Media Platforms: IGN Entertainment (IGN, Eurogamer, Digital Foundry, Rock Paper Shotgun, MapGenie) offering content on video games, movies, anime, TV, comics, and technology.
• Digital Storefront/Subscription: Humble Bundle (video games, ebooks, software, with a charitable giving component).

Market Dynamics: Reaches over 440 million monthly users in more than 100 countries, engaging 85 million fans on social media. Humble Bundle was recognized on the 2024 Inc. Magazine Best in Business list and received multiple Anthem Awards for its charitable work.

Health & Wellness

Financial Performance:

• Revenue: $362.4 million (+0.1% YoY)
• Operating Margin: 18.5%
• Key Growth Drivers: An $8.4 million increase in subscription and licensing revenues, primarily from an $8.0 million increase in the Health & Wellness Consumer business. This was partially offset by a $9.7 million decline in advertising and performance marketing revenue from the Health & Wellness Professional business.

Product Portfolio:

• Consumer: Everyday Health, DailyOM, Lose It!, Migraine Again, Castle Connolly (interactive tools, mobile apps, digital content for health management).
• Professional: MedPage Today, PRIME Education, Health eCareers (educational services, news, information for healthcare professionals, job portal).
• Pregnancy & Parenting: BabyCenter, Emma’s Diary, What to Expect, Mom Media (content via websites, mobile apps, online communities).

Market Dynamics: Focuses on improving clinical and health outcomes through relevant information, data, and analytics. Organized into Health & Wellness Consumer, Health & Wellness Professional, and Health & Wellness Pregnancy & Parenting segments. PRIME Education received the William Campbell Felch Award for Outstanding Research in Continuing Education in 2024.

Connectivity

Financial Performance:

• Revenue: $213.6 million (+1.0% YoY)
• Operating Margin: 37.2%
• Key Growth Drivers: A $6.7 million increase in subscription and licensing revenues, primarily from a $4.3 million increase in network performance services. This was partially offset by declines in other revenues and advertising and performance marketing revenues.

Product Portfolio:

• Network Intelligence: Ookla (Speedtest for fixed broadband, mobile network, and Wi-Fi testing, analysis, and insights).
• Wi-Fi Solutions: Ekahau (products and services for designing, optimizing, and managing Wi-Fi, Private 4G, and Private 5G networks).
• Outage Tracking: Downdetector (real-time status information and outage tracking for digital services).
• Mobile Benchmarking: RootMetrics (drive testing solutions and performance benchmarking of mobile service providers in the U.S. and U.K.).

Market Dynamics: Sits at the center of the broadband ecosystem, providing information on internet connectivity and network performance. Speedtest has recorded over 50 billion tests to date, with over eleven million daily user-initiated tests.

Cybersecurity & Martech

Financial Performance:

• Revenue: $283.5 million (-2.6% YoY)
• Operating Margin: 19.4%
• Key Growth Drivers: Revenue decreased primarily due to a $5.6 million decline in consumer privacy services within the cybersecurity business. Operating income increased due to a $19.5 million decrease in operating costs and expenses, mainly from a $19.6 million decrease in depreciation and amortization expense.

Product Portfolio:

• VIPRE Security Group: IPVanish (VPN services), VIPRE software solutions (endpoint and email security, threat intelligence), Inspired eLearning (cybersecurity awareness training), Livedrive (online backup/storage), SugarSync (file backup/sync/sharing).
• MOZ Group: Campaigner, iContact, SMTP, Kickbox, Full Contact (email marketing solutions), MOZ Pro, MOZ Local, Stat Analytics (search engine optimization tools), eVoice, Line2 (voice and text communication services).

Market Dynamics: Provides internet-delivered cloud-based SaaS offerings to consumers and businesses of all sizes, aiming to reduce costs, increase sales, and enhance productivity, mobility, business continuity, privacy, and security.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: Ziff Davis, Inc. repurchased 3.5 million shares for $181.8 million in 2024, following 1.58 million shares for $104.9 million in 2023. Cumulatively, 8.76 million shares have been repurchased under the 2020 Program for $583.6 million.
• Dividend Payments: The Company did not pay dividends during the years ended December 31, 2024, 2023, and 2022.
• Future Capital Return Commitments: The Board authorized an increase of five million shares to the 2020 Program, extending it to August 2029. As of December 31, 2024, 6.24 million shares remained available for repurchase under the program.

Balance Sheet Position:

• Cash and Equivalents: $505.9 million as of December 31, 2024.
• Total Debt: $864.3 million as of December 31, 2024.
• Net Cash Position: -$358.4 million (net debt position).
• Debt Maturity Profile: $149.1 million in 2026, $263.1 million in 2028, and $460.0 million in 2030.

Cash Flow Generation:

• Operating Cash Flow: $390.3 million in 2024, an increase of $70.4 million from 2023. This increase was primarily driven by the timing of customer collections and vendor payments, and a positive impact of $50.9 million from the TDS Gift Cards acquisition.
• Free Cash Flow: $283.7 million in 2024 (Operating Cash Flow of $390.3 million minus Capital Expenditures of $106.6 million).

Operational Excellence

Production & Service Model: Ziff Davis, Inc.'s operational model is diversified across its segments. Digital Media Businesses focus on publishing and producing trusted editorial content and tools. The Connectivity segment develops actionable broadband network intelligence through extensive data collection and analysis, delivering products and services to improve network performance. The Cybersecurity & Martech business provides internet-delivered cloud-based subscription and licensed services, aiming to enhance productivity, mobility, business continuity, privacy, and security for its customers.

Supply Chain Architecture: Key Suppliers & Partners:

• Infrastructure & Technology: The Company relies on third-party providers for internet, telecommunications, website traffic, co-location of servers, and other hosting services.
• Platform Access: Third-party platforms are utilized to facilitate and provide access to products sold through the Company's sites.
• Marketing & Sales: Marketing agreements with leading search engines and websites, and resellers are employed to sell products.

Facility Network:

• Global Headquarters: Leased office space of approximately 23,000 square feet in New York City, with a lease extending through December 2030.
• Regional Offices: Smaller leased offices are maintained throughout Asia, North America, Europe, and Australia.
• Network Infrastructure: All network equipment is housed in multiple co-location facilities globally.
• Testing Facilities: Operates one of the longest-running independent testing facilities for consumer technology products (PCMag).

Operational Metrics:

• Advertising & Performance Marketing: Net revenue retention was 92.0% in 2024 (up from 87.1% in 2023), with 1,899 customers and quarterly revenue per customer of $135,762 in 2024.
• Subscription & Licensing: Total customers were 3.65 million in 2024 (up from 3.27 million in 2023), with average quarterly revenue per customer of $40.44 and a churn rate of 2.83% in 2024.
• Connectivity: Ookla's Speedtest platform processes over eleven million daily user-initiated tests, with more than 50 billion tests completed to date.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Utilizes a telesales and direct sales force, particularly for its Cybersecurity & Martech offerings, to reach sole proprietors, small to medium-sized businesses, and enterprises.
• Channel Partners: Engages with resellers and other channel partners to extend the reach of its Cybersecurity & Martech offerings. Also maintains marketing agreements with operators of leading search engines and websites.
• Digital Platforms: Leverages its owned-and-operated websites and applications, as well as third-party sites and advertising networks, for online display and video advertising. Facilitates e-commerce through product listings, deals, and discounts on its web properties. Humble Bundle operates as a digital storefront and subscription service.

Customer Portfolio: Enterprise Customers:

• IT Decision Makers: Spiceworks targets IT vendors to influence corporate IT decision makers.
• Healthcare Employers: Health eCareers contracts with thousands of healthcare employers across the U.S.
• Broadband Ecosystem: Ookla solutions are adopted by internet service providers, mobile service providers, enterprise Wi-Fi systems integrators, and regulatory bodies worldwide.
• SMBs & Enterprises: Cybersecurity & Martech offerings are marketed to a broad spectrum of business customers, from sole proprietors to mid-sized enterprises. Customer Concentration: The filing does not disclose specific customer concentration risk metrics or percentages from top customers.

Geographic Revenue Distribution:

• United States: 83.2% of total revenue ($1,165.6 million) in 2024.
• All other countries: 16.8% of total revenue ($236.1 million) in 2024.
• Growth Markets: The Company continues to expand its international operations, with a focus on markets such as Canada, the United Kingdom, Australia, the European Union, Japan, Denmark, Sweden, and Norway.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The markets in which Ziff Davis, Inc. operates are highly competitive and characterized by rapid technological change. Competition spans diversified internet and digital media companies, vertical-specific digital media companies, large advertising product sellers, connectivity analytics providers, network testing sites, email marketing solution providers, marketing automation services, cybersecurity software and service vendors, and virtual private network providers.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Digital Media: IAC, Future PLC, Red Ventures, Penske Media, Integrated Media, Internet Brands, RVO Health, TechTarget, Vox Media, Centerfield, Doximity, Fandom, Alphabet, Meta, Snap, Twitch.
• Connectivity: Opensignal, Accenture, NetAlly, IBWave.
• Cybersecurity & Martech: Palo Alto Networks, CrowdStrike, Proofpoint, Gen Digital Inc., Kape Technologies, KnowBe4, Malwarebytes, SEMRush, MailChimp, Campaign Monitor, Constant Contact, Dialpad, Constellation Software, Tyler Technologies.

Emerging Competitive Threats: The Company faces risks from the rapid evolution and increased adoption of generative artificial intelligence (AI) and related technologies, which could facilitate unauthorized access, duplication, and distribution of content, potentially reducing online traffic, infringing intellectual property rights, and harming reputation. New market entrants, disruptive technologies, and alternative solutions also pose competitive threats.

Competitive Response Strategy: Ziff Davis, Inc. aggressively protects its intellectual property rights through patents, trademarks, copyrights, trade dress, and trade secrets, and invests in patent prosecution and licensing. The Company devotes significant resources to research and development to enhance existing services and introduce new offerings, aiming to anticipate and adapt to technological changes, including AI. It also implements strategies to combat ad-blocking technologies.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Acquisition Dependence: Inability to identify and execute new acquisitions or investment strategies could negatively impact growth.
• Advertising Revenue Volatility: The majority of Digital Media Businesses' revenue is from short-term advertising arrangements, susceptible to advertiser budget cuts, supply chain issues, economic conditions, and extraordinary events.
• Content & ROI: Failure to develop or acquire compelling content at acceptable prices, or to demonstrate attractive ROI for advertisers, could harm operating results.
• Economic Conditions: Weakened global and U.S. economic conditions, including inflation, fluctuating interest rates, and political instability, may decrease service usage, advertising levels, and customer acquisition/retention.
• Climate Change: Adverse climate-related events could disrupt business locations, impact critical systems, and affect employee ability to perform duties, potentially leading to increased costs or turnover. Technology Disruption:
• Generative AI: Risks include unauthorized use of content, IP infringement, reduced online traffic, and reputational harm from AI-generated inaccurate information. The evolving legal framework for AI presents compliance costs and uncertainty.
• Technological Obsolescence: Rapid technological changes in the industry may render existing services and technologies obsolete, requiring continuous adaptation and investment.

Operational & Execution Risks

Supply Chain Vulnerabilities:

• Third-Party Dependency: Reliance on third parties for critical business elements such as technology, infrastructure, customer service, sales, and marketing components, including internet, telecommunications, hosting, and third-party platforms. Geographic Concentration:
• International Operations: Exposure to risks from international operations, including adverse currency fluctuations, foreign exchange controls, political/social unrest, economic instability, increased tariffs, and difficulties in staffing and managing international operations. System Failures & Security Breaches:
• Cybersecurity Threats: Operations are vulnerable to system failures, security breaches, cyber-attacks (viruses, ransomware, unauthorized access, phishing), and data loss, which could lead to significant liability, reputational harm, and increased costs. The rapid evolution of AI technologies may intensify these risks. Intellectual Property:
• Infringement Claims: Risk of being found to infringe the intellectual property rights of others, leading to litigation, damages, royalties, or the need to modify/discontinue products.
• IP Protection: Challenges in protecting proprietary technology, content, and intellectual property from unauthorized use, especially in foreign countries. Billing Systems:
• Billing Accuracy: Dependence on proper functioning of complex billing systems and third-party interfaces; failures could impair billing and customer acquisition.
• Payment Processing: Risks associated with excessive credit/debit card declines, fraudulent activity, and compliance with evolving Payment Card Industry (PCI) data security standards. Legal Claims:
• Content Liability: Potential liability for legal claims based on the nature and content of created or distributed materials, particularly health-related information, if inaccuracies lead to reliance and harm.
• General Litigation: Exposure to various legal disputes and regulatory inquiries, including patent infringement and data privacy, which can incur unforeseen expenses and divert management resources. Search Engine Dependence:
• Traffic Generation: Dependence on attracting visitors from search engines; changes in search algorithms or failure to comply with guidelines could reduce traffic and revenue. Ad Blocking:
• Revenue Impact: Development and adoption of ad-blocking technologies can reduce the number of advertisements delivered and impair interest-based advertising, negatively impacting advertising revenue.

Financial & Regulatory Risks

Market & Financial Risks:

• Indebtedness: High level of indebtedness could adversely affect financial flexibility, competitive position, and require a significant portion of cash flow for debt service, limiting funds for growth initiatives.
• Convertible Notes: Inability to raise funds to settle conversions or repurchase convertible notes upon a fundamental change or senior notes upon a change in control could lead to liquidity problems or default. Regulatory & Compliance Risks:
• Evolving Regulations: Subject to a variety of new, existing, and changing domestic and international laws and regulations across areas such as privacy, data storage, content, taxation, telecommunications, export restrictions, and consumer protection.
• Data Privacy: Compliance with laws like GDPR, CCPA/CPRA, VPPA, CIPA, and HIPAA imposes significant costs and risks, particularly concerning health and sensitive data, with uncertain interpretations and potential for substantial penalties.
• Communication Regulations: Use of email, SMS, and phone calls is subject to laws like CAN-SPAM and TCPA, with potential for significant fines for non-compliance.
• Healthcare Industry Regulation: Everyday Health Group is subject to specific healthcare regulations (e.g., anti-kickback laws, FDA/FTC advertising rules, corporate practice of medicine prohibitions), which could create liabilities or restrict business practices.
• Telecommunications Regulation: VoIP offerings are subject to CALEA, and potential reclassification of services as telecommunications services could lead to fines, regulatory fees, and increased obligations.
• "Do Not Track" & Data Monetization: New regulations or user sentiment regarding online tracking and data sharing could limit the ability to collect and monetize user behavioral data, impacting advertising and data businesses.

Geopolitical & External Risks

Geopolitical Exposure:

• International Instability: Operations in foreign countries expose the Company to risks from political or social unrest, economic instability, and unforeseen global crises such as war, acts of terrorism, or pandemics.
• Trade Relations: Increased tariffs, trade protection measures, and changes in trade policies could affect the ability to provide services and impact financial results.
• Sanctions & Export Controls: Compliance with U.S. export control laws and economic sanctions imposes requirements and restrictions on business activities in certain nations and with specific persons.

Innovation & Technology Leadership

Research & Development Focus: Ziff Davis, Inc. maintains an ongoing commitment to research and development (R&D) to adapt to rapidly evolving markets and introduce new services and enhancements. R&D expenditures were $67.4 million in 2024, $68.9 million in 2023, and $74.1 million in 2022. The Company capitalizes costs incurred during the application development stage of software development, amortizing them over an estimated useful life of typically three years.

Intellectual Property Portfolio:

• Patent Strategy: The Company has built a portfolio of numerous U.S. and foreign patents through internal development and acquisitions. It actively invests in patents, protects its patent assets from unauthorized use, and generates licensing revenues. Multiple U.S. and foreign patent applications are pending.
• Licensing Programs: Generates royalties from licensing certain patents and enforces patents against unauthorized users.
• Trademarks & Domain Names: Owns and uses a number of trademarks globally, including IGN, CNET, Everyday Health, BabyCenter, Humble Bundle, PCMag, Mashable, Ookla, Speedtest, and RetailMeNot. Holds numerous internet domain names such as "everydayhealth.com", "retailmenot.com", "pcmag.com", "ign.com", "speedtest.net", "offers.com", "humblebundle.com", "mashable.com", and "babycenter.com".

Technology Partnerships: The Company relies on third-party providers for critical technology and infrastructure elements, including internet, telecommunications, website traffic, and hosting services.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: The Company's success is dependent on retaining its executive officers and senior management, and its ability to attract, integrate, and retain highly qualified technical, sales, and managerial personnel. The Company views its ability to effectively integrate new employees and businesses from acquisitions as a core competency.

Board Composition: The Board of Directors oversees cybersecurity risk, delegating specific oversight to the Audit Committee. The Audit Committee receives quarterly reports from management on cybersecurity risks and updates on material incidents. Board members receive presentations on cybersecurity topics from the Chief Information Security Officer, internal security staff, or external experts. Directors include Vivek Shah, Sarah Fay, Jana Barsten, Trace Harris, William B. Kretzmer, Kirk McDonald, Scott C. Taylor, and Neville R. Ray.

Human Capital Strategy

Workforce Composition: As of December 31, 2024, Ziff Davis, Inc. had approximately 3,800 employees, with 56% based in the U.S. and 44% non-U.S. based. Approximately 130 editorial employees in the Technology & Shopping and Gaming & Entertainment segments are unionized.

Talent Management: Acquisition & Retention:

• Hiring Strategy: The Company focuses on attracting diverse candidates, with 28% of 2024 U.S. new hires being people of color and 50% being women. Initiatives include participation in Afrotech conferences and the Restart Program, a paid returnship for individuals out of the workforce for two or more years.
• Retention Strategies: The Company provides competitive compensation packages and comprehensive benefits designed to attract and retain talent.
• Employee Value Proposition: Benefits include comprehensive health insurance (covering 83% of premiums for U.S. employees), an employee stock purchase program, a 401(k) program, flexible time off, free telemedicine access, and up to 16 weeks of paid parental leave for birth parents.

Diversity & Development:

• Diversity Metrics: Ziff Davis, Inc. published its fifth Annual Diversity Report in 2024, detailing workforce representation.
• Development Programs: Offers a Global Mentorship Program and an Internal Mobility Program.
• Culture & Engagement: Fosters a culture of collaboration and embraces micro-cultures within its businesses. The "ZD BeWell" program offers free access to meditation/healthy eating apps and wellness webinars. The Company provides 16 hours of paid Volunteer Time Off annually and supports an Employee Assistance Fund for employees facing financial hardship.

Environmental & Social Impact

Environmental Commitments: Climate Strategy:

• Emissions Targets: Ziff Davis, Inc. is committed to reducing its environmental footprint and assisting customers in reducing theirs. The Company conducts a third-party verified greenhouse gas inventory, calculating Scope 1, 2, and 3 emissions.
• Carbon Neutrality: Not explicitly stated as a commitment, but emissions reduction is a focus. Supply Chain Sustainability:
• Supplier Engagement: Engages with suppliers on ESG requirements and promotes supplier diversity programs.
• Responsible Sourcing: Focuses on responsible materials sourcing and compliance with conflict minerals regulations.

Social Impact Initiatives:

• Community Investment: Supports employees globally and aims to positively impact local communities through initiatives like 16 hours of paid Volunteer Time Off and partnerships with Benevity and Visit.org. The Employee Assistance Fund (EAF) provides support to employees impacted by unexpected financial hardship.
• Product Impact: The Company's enterprise culture emphasizes "Doing is Greater than Talking," galvanizing employees to create social value and impact.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: Revenues from Digital Media Businesses are subject to seasonal fluctuations, typically higher during the fourth-quarter holiday period due to increased retail activity.
• Economic Sensitivity: Connectivity business revenues can be impacted by the timing of significant transactions. Cybersecurity & Martech revenues are affected by the number of effective business days in a period, with lower usage and customer sign-ups traditionally experienced in the fourth quarter.
• Industry Cycles: The Company's diverse portfolio helps mitigate sector-specific cyclical patterns, though overall economic conditions can still influence performance.

Regulatory Environment & Compliance

Regulatory Framework: Ziff Davis, Inc. is subject to a wide array of foreign and domestic laws and regulations governing internet businesses, including those related to privacy, data storage, content, taxation, telecommunications, advertising, and intellectual property.

Industry-Specific Regulations:

• Content & Liability: Relies on protections from the Digital Millennium Copyright Act (DMCA) and portions of the Communications Decency Act (CDA) for third-party content.
• Data Privacy: Complies with the Children’s Online Privacy Protection Act (COPPA) for children under 13, the Providing Resources, Officers, and Technology to Eradicate Cyber Threats to Our Children Act (PROTECT Act) for child pornography reporting, the California Consumer Privacy Act (CCPA) as amended by the California Privacy Rights Act (CPRA), and the General Data Protection Regulation (GDPR) in the EU, which imposes significant compliance burdens and data transfer restrictions.
• Communications: Adheres to the Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM Act) and the Telephone Consumer Protection Act (TCPA) for email, SMS, and phone communications.
• Healthcare: Everyday Health Group is subject to healthcare privacy laws like HIPAA (Privacy and Security Standards), HITECH, and state-specific regulations, as well as oversight from the FDA and FTC regarding advertising and promotion of health products.
• Telecommunications: VoIP offerings are subject to the Communications Assistance to Law Enforcement Act (CALEA). The Company believes its cloud services are "information services" under the Telecommunications Act of 1996.
• Advertising: Complies with FTC Guidelines and the UK CAP Code for native advertising.
• Emerging Regulations: Monitors new "Do Not Track" regulations and other evolving laws that could restrict data collection and monetization.

Trade & Export Controls: The Company is subject to U.S. export control laws and regulations that impose requirements and restrictions on exports to certain nations and persons.

Legal Proceedings: Ziff Davis, Inc. has been involved in legal proceedings, including a putative class action lawsuit alleging federal securities law violations (dismissed and affirmed on appeal) and derivative claims against directors (dismissed without prejudice). The Company does not believe these are likely to have a material adverse effect on its financial position. It is currently under audit for indirect taxes in various states, municipalities, and foreign jurisdictions, and its U.S. federal income tax returns for 2012-2016 are under IRS audit.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: The Company's effective tax rate was 44.4% in 2024, compared to 32.2% in 2023. The 2024 rate was primarily impacted by a goodwill impairment with no corresponding tax benefit and a valuation allowance against U.S. capital loss carryforwards, partially offset by a decrease in uncertain tax position reserves.
• Geographic Tax Planning: Income is subject to taxation in the U.S. and numerous foreign jurisdictions. The Company has not provided for deferred taxes on approximately $178.5 million of undistributed foreign earnings, considering them permanently reinvested.
• Tax Reform Impact: Ziff Davis, Inc. has analyzed the OECD's Pillar Two Framework, including the EU's Pillar Two Directive (effective January 1, 2025), and does not expect it to have a material effect on its corporate tax liability or consolidated effective tax rate.
• Uncertain Tax Positions: As of December 31, 2024, the total unrecognized tax benefits for continuing operations were $22.6 million, with $21.2 million potentially affecting the effective tax rate if recognized.

Insurance & Risk Transfer

Risk Management Framework: Ziff Davis, Inc. maintains insurance coverage for cybersecurity risks, though it acknowledges that such coverage may not be sufficient for all potential losses. For legal claims, the Company does not always have insurance coverage for defense costs, judgments, and settlements. The Company has not historically engaged in foreign currency hedging transactions, as cash flows from international operations were generally reinvested locally, but may do so in the future. While current long-term debt has fixed interest rates, future borrowings under the revolving credit facility would expose the Company to variable interest rate changes, and it has not entered into interest rate hedging transactions to date.