Ziff Davis, Inc. ((ZD)) has held its Q4 earnings call. Read on for the main highlights of the call.
Ziff Davis’ recent earnings call painted a picture of both growth and challenges. The company reported notable revenue and EPS growth in 2024, driven by strategic capital allocation and a positive outlook for 2025. However, the call also highlighted significant setbacks, particularly in the Connectivity and Humble Games segments, which contributed to a Q4 revenue shortfall.
Revenue and EPS Growth
Ziff Davis achieved a commendable 5.9% revenue growth for Q4 2024, alongside a 10.7% increase in adjusted diluted EPS. This marked the best revenue growth quarter of the year, underscoring the company’s ability to drive financial performance despite market challenges.
Return to Revenue Growth
The fiscal year 2024 saw a 2.8% increase in revenue and a 2.3% growth in adjusted EBITDA, signaling a return to growth for Ziff Davis. This positive trend reflects the company’s strategic efforts to enhance its financial standing and operational efficiency.
Strong Capital Allocation
In 2024, Ziff Davis deployed over $225 million for acquisitions and more than $185 million for share repurchases, retiring 7.6% of its shares outstanding at the start of the year. This strategic capital allocation underscores the company’s commitment to enhancing shareholder value.
Positive Outlook for 2025
Looking ahead, Ziff Davis projects an acceleration of revenue growth to 5% and adjusted EBITDA growth to 6% in 2025. The company anticipates growth across all segments for the first time in several years, highlighting a promising future.
AI Initiatives and Innovations
Ziff Davis is making strides in AI, with CNN highlighting AI-powered features in the Lose It! app. Additionally, Health eCareers reported an 18% increase in engagement with their AI-powered job search functionality, showcasing the company’s innovative edge.
Q4 Revenue Shortfall
Despite overall growth, Q4 2024 revenues fell short of expectations by $10 million. This shortfall was primarily due to underperformance in the Humble Games Publishing and Connectivity businesses, reflecting challenges in these segments.
Challenges in Connectivity and Humble Games
The Connectivity segment did not meet expectations for large deal activity, while Humble Games Publishing faced delays and underperformance in some titles. These challenges were significant contributors to the Q4 revenue miss.
Decline in Cybersecurity and Martech
The Cybersecurity and Martech segment experienced a nearly 3% revenue decline in 2024. However, this was an improvement compared to the previous year’s decline, indicating a potential turnaround.
Forward-Looking Guidance
Ziff Davis’ guidance for 2025 is optimistic, with an expected acceleration in revenue growth to a midpoint of 5% and adjusted EBITDA growth to 6%. The company anticipates growth in all five reportable segments, with the Tech & Shopping segment forecasted as the strongest grower. The firm also plans to enhance transparency by expanding from two to five reportable segments.
In summary, Ziff Davis’ earnings call highlighted a year of growth and strategic capital allocation, despite facing challenges in certain segments. The company’s positive outlook for 2025, driven by expected growth across all segments and innovative AI initiatives, positions it well for future success.