Ziff Davis: The Profit That Is No Longer There

The receipt trap

Picture a friend proudly showing you his annual statement. At the very bottom there is a number in black. He worked, it paid off, all good. What he does not mention: half of it came from a side job he quit last week.

The number is correct. It is audited, signed off, accurate. And it still describes a world that no longer exists.

That is exactly what happened at Ziff Davis — and it is provable, in a document the company itself had to file with the U.S. securities regulator, the SEC. Call it the receipt trap: we read the total at the bottom and forget to check which items are still on the menu.

The deal for this article: we retype the bill together. Line by line, using the original figures from the 2025 annual report (Form 10-K), the quarterly report for the period ended March 31, 2026 (Form 10-Q) and the current reports (Form 8-K) around the sale. By the end you will know what the continuing business actually earns — and how much cash Ziff Davis has in the bank.

What Ziff Davis actually does

Ziff Davis is not a publisher in the old sense. It is a bundle of internet brands under one roof. The group buys websites, apps and software services, plugs them into a shared advertising and subscription machine, and earns money three ways: from advertising and performance marketing, from subscriptions and licensing, and from a remainder made up of hardware, courses and game distribution.

Five segments are reported separately. Technology & Shopping holds CNET, PCMag, Mashable, Lifehacker, ZDNET and Spiceworks, plus the deal sites RetailMeNot, VoucherCodes and Offers.com. Gaming & Entertainment holds IGN, Eurogamer, Rock Paper Shotgun and the game store Humble Bundle. Health & Wellness gathers Everyday Health, MedPage Today, BabyCenter, What to Expect and the weight-loss app Lose It!. Cybersecurity & Martech runs VIPRE and Inspired eLearning. And then there was Connectivity — the Ookla brand behind Speedtest, which millions of people use to measure their internet speed.

That last one is no longer part of the group. It has been sold. More on that shortly.

A note on corporate history: until October 4, 2021 the company was called J2 Global, before that J2 Global Communications and originally JFAX.COM. Anyone looking for price history or older figures before 2021 will find them under those names. The company is incorporated in Delaware, the office is in New York, and roughly 3,900 people worked for the group as of December 31, 2025, 55 percent of them in the United States.

One sentence from the annual report describes the business model better than any analysis:

“The Company has made nearly 100 acquisitions between 2012 and 2025, including seven during 2025 (exclusive of any acquisitions that were part of businesses we have since divested).”

— Ziff Davis, Inc., Form 10-K for 2025, Item 1, Human Capital Resources

Nearly 100 acquisitions means almost everything you see inside this group was paid for once. That shapes every line of the balance sheet — and we get to the goodwill chapter below.

How the stock landed on our desk

The stock surfaced through our in-house stock scanner "Turnaround candidates". It tests four pillars to see whether a fallen stock is finding its feet: has the price really crashed, is survival secured, is the operating business turning, and is the market confirming it?

To repeat the search: go to Stocks → Scanner, open "Turnaround candidates" and pick "USA" as the market in the top right. The list is sorted by the turnaround check out of 8 possible points.

An honest caveat belongs right here. On July 27, 2026 the scanner counted 60 U.S. hits — identical on both of our brands. Ziff Davis scores 6 out of 8 on the turnaround check. The problem: 44 of those 60 names also score exactly 6. Together they occupy places 17 through 60, and inside that group no second criterion decides the order — only the arbitrary sequence of the database. On the same day ZD appeared in place 46 on one instance and place 45 on the other. Quoting an exact rank would be invented precision, so we do not.

More honestly still: the scanner page shows only the 25 strongest hits. Ziff Davis sits below that line and does not appear on the list at all. The stock passes the filter, but it is not a leader. Anyone looking for it will find it on the symbol page, not in the ranking. All lists are recomputed daily, so the figures in this section carry July 27, 2026 as their date and may look different tomorrow.

Two other rankings of ours listed ZD that same day: the KCF ranking and the K-FCF ranking. Both measure how much cash a company generates relative to its market value — and on that count Ziff Davis looks good. That is one half of the story.

The mandatory pillars of the turnaround filter, translated:

• Crash (mandatory): at least 50 percent below the all-time high. The highest closing price since the listing began is $132.98, set on November 9, 2021. On July 24, 2026 the stock closed at $51.60 — 61.2 percent below that. Comfortably met.
• Survival (mandatory): the Altman-Z score estimates bankruptcy risk from four balance sheet ratios; anything below 1.1 counts as the danger zone in our scanner. Our own calculation from the 2025 annual report gives 1.78 on the original formula and 3.02 on the variant normally used for non-manufacturers. Both clear the threshold. The equity ratio stood at 50.7 percent as of March 31, 2026 — a good half of every dollar of assets belongs to shareholders.
• Tradability: price above $3, daily dollar volume above $2 million. Both met.

A score of 6 out of 8 means six of the eight turnaround signals speak for the stock and two do not. That is respectable, but it is not an exclamation mark — one name on the same list scored 8 out of 8.

One metric in our own data set deserves a warning. The stored Altman-Z value is 6.89. We could not reproduce that number from the audited annual report, neither with the original formula nor with the service-company variant. Throughout this article we therefore use our own figures. For the scanner nothing changes, because 1.78 still clears the threshold. For you something does change: a pretty metric is no substitute for reading the balance sheet.

The numbers over the years — what genuinely impresses

Start with what is honestly good. Ziff Davis earns money — real, tangible money.

Net cash provided by operating activities rose from $320.0 million in 2023 to $390.3 million in 2024 and $407.1 million in 2025. After $119.2 million of purchases of property and equipment, free cash flow in 2025 came to roughly $287.9 million, following $283.7 million and $211.2 million in the two prior years. A company that generates more cash every year for three years running is not doing everything wrong.

The gross margin is impressive too: in 2025 revenue of $1,451.3 million carried only $206.6 million of direct costs. That is close to 86 percent gross margin — typical of a business where the expensive part is written once and then served millions of times.

Management is not spending that money aimlessly either; it buys back stock. On January 1, 2023 there were 47,269,446 shares outstanding. By May 4, 2026 there were 36,835,400. That is a decline of 22.1 percent in a little over three years. In plain terms: an investor who bought in 2023 and did nothing since owns a bigger slice of the same cake today.

The revenue series reads well too: $1,364.0 million in 2023, $1,401.7 million in 2024, $1,451.3 million in 2025. Three years, three increases.

That is one side of the sheet. Now we turn it over.

Uncomfortable truth No. 1: the profit came from the division that is gone

On March 2, 2026 Ziff Davis signed a purchase agreement with Accenture: the Connectivity division — the Ookla brand with Speedtest — would change hands for $1.2 billion in cash. The sale closed on June 17, 2026. After a purchase price adjustment and transaction costs, $1,194.4 million came in, of which $37.0 million sits in escrow for eighteen months.

Four days later Ziff Davis had to file what U.S. rules require after a sale of that size: a comparative statement showing what the past years would have looked like without the division. It sits in the Form 8-K/A of June 22, 2026, and it is the real charge in this analysis.

The arithmetic is simple: $47.4 million of reported net income for 2025, less the $57.2 million attributable to the division sold, leaves minus $9.8 million. Earnings per share of $1.15 become a loss of 24 cents.

And that was not a one-off. The same calculation shows a loss of $1.8 million for 2024, against a reported profit of $63.0 million, and a loss of $14.0 million for 2023, against a reported profit of $41.5 million. For three consecutive years the rest of the group earned nothing at the bottom line. That only became visible once the company sold the division.

The segment numbers explain why. In 2025 Connectivity was the smallest revenue contributor at $230.7 million, or 15.9 percent of the group. On operating income it accounted for $76.1 million of $256.4 million of total segment income — almost 30 percent. Its operating margin was 33.0 percent; the rest of the group ran at roughly 8.6 percent after the unallocated corporate overhead of $73.3 million.

The look at the largest revenue segment is especially awkward. Technology & Shopping — CNET, PCMag, Mashable and RetailMeNot — brought in $356.6 million of revenue in 2025 but only $9.3 million of operating income. In the two years before it posted operating losses of $71.1 million (2024) and $50.5 million (2023). This is the segment with the most famous brand names. It is also the one where the least has stuck.

The most recent evidence sits in the quarterly report for the period ended March 31, 2026, the latest filing before we went to press: continuing operations generated $267.6 million of revenue (down from $272.8 million a year earlier), $2.9 million of operating income (down from $14.5 million) and a net loss of $0.8 million. Of the reported quarterly profit of $22.3 million, $23.0 million came from discontinued operations — that is, from the division the group no longer owns.

Uncomfortable truth No. 2: without acquisitions, revenue shrinks

Remember the friendly revenue series above? $1,364.0 million, $1,401.7 million, $1,451.3 million. Three years of growth. Now look at where it came from.

In 2024 Ziff Davis bought two larger businesses: the gift card and branded payments platform TDS Gift Cards in February 2024 and the technology publisher CNET in September 2024, together for $365.1 million. The annual report contains one sentence worth reading twice:

“For the year ended December 31, 2024, the Company recorded $83.2 million of incremental revenue from the businesses acquired during 2024.”

— Ziff Davis, Inc., Form 10-K for 2025, Note 4 — Acquisitions and Dispositions

Do the arithmetic. Revenue grew by $37.7 million in 2024. Acquisitions contributed $83.2 million. So the pre-existing business shrank by roughly $45.5 million in the same year — about 3.3 percent.

The annual report supplies the cross-check itself. Note 4 contains a comparative table in which TDS and CNET are treated as if they had belonged to the group from January 1, 2023. On that genuinely comparable basis, 2024 revenue was $1,470.2 million against $1,521.1 million in 2023. A decline of 3.3 percent — the same finding from a second direction.

That is the heart of the business model: Ziff Davis buys growth. Acquisitions consumed $9.5 million of cash in 2023, $217.6 million in 2024 and another $67.3 million in 2025 for seven companies. As long as the buying continues, the revenue line rises. When the buying stops, so does the growth.

And acquisitions do not always end well. On December 31, 2025 Ziff Davis sold its video game publishing business and booked a pre-tax loss of $58.0 million on the disposal. We have seen a similar pattern in our analysis of Teradata, where a solid legacy business also shrinks a little every year while the company hunts for its turnaround.

Uncomfortable truth No. 3: more goodwill than equity

When one company buys another and pays more than the acquired assets are worth, the difference lands on the balance sheet as goodwill. Think of it as the premium for a good reputation: you paid for it, you cannot touch it. Across nearly 100 acquisitions, that adds up.

As of December 31, 2025 the Ziff Davis balance sheet showed:

• $1,607.5 million of goodwill
• $344.2 million of intangible assets (trade names, customer relationships, purchased technology)
• $1,951.7 million combined

Against that stood equity of $1,753.6 million. In other words, the premium paid for acquisitions exceeded total equity by 11 percent. Subtract both and tangible book value comes to minus $198.1 million. On paper, shareholders owned less than nothing in hard assets at the end of 2025.

The intangibles are already largely written down: against historical cost of $1,606.5 million sits accumulated amortization of $1,262.3 million, or 78.6 percent. That explains the strikingly heavy depreciation and amortization charge of $228.7 million in 2025, equal to 15.8 percent of revenue. It suppresses reported profit without costing cash — which is why cash flow looks so much better than earnings.

Goodwill is tested regularly. The auditor, KPMG, explicitly flagged the valuation as a critical audit matter. The results of the last three years: an impairment charge of $56.9 million in 2023, $85.3 million in 2024 and $17.6 million in 2025, or $159.8 million combined. Accumulated impairment losses as of December 31, 2025 stood at $169.5 million in Technology & Shopping and $17.6 million in Cybersecurity & Martech.

That is where the next question waits. Cybersecurity & Martech carries $540.0 million of goodwill, the single largest block. At the same time its operating income fell from $55.0 million in 2024 to $28.6 million in 2025, and revenue slipped from $283.5 million to $278.0 million. A segment whose earnings halve while $540 million of purchase premium sits on the books is the natural candidate for the next write-down.

The good news: after the sale this looks far friendlier. The pro forma balance sheet as of March 31, 2026 shows equity of $2,404.3 million against $1,343.8 million of goodwill and $314.1 million of intangibles. Tangible book value swings to plus $746.4 million. The $1.2 billion check filled the hole.

Uncomfortable truth No. 4: AI is reading along

Ziff Davis lives on people reading its articles. Someone who wants to know which television is worth buying searches on Google, lands on PCMag or CNET and sees advertising there. That path is changing right now. When an AI answer engine delivers the information directly, nobody clicks through to the source.

The company writes this down as a risk in its own annual report:

“Developments in the use of generative AI and related technologies make it easier to access, duplicate, and distribute our content, or otherwise generate output based on our content, without authorization, fair compensation, or proper attribution. These technologies may reduce our online traffic and audience sizes, infringe our intellectual property rights, and adversely affect our business, financial condition, and results of operations.”

— Ziff Davis, Inc., Form 10-K for 2025, Item 1A — Risk Factors

Ziff Davis is fighting back in court. On April 24, 2025 it sued OpenAI for copyright infringement; on May 14, 2025 the case was consolidated with other actions against OpenAI in the Southern District of New York. On February 6, 2026 a second suit followed against Google and Alphabet, alleging antitrust violations around publisher ad servers and ad exchanges. Both cases were still pending as of the quarterly report filed May 8, 2026. No outcome is foreseeable and no amount is stated anywhere.

A footnote with some irony: in July 2023 Ziff Davis bought a $25.0 million minority stake in the AI company OpenEvidence. On April 24, 2025 — the same day it filed suit against OpenAI — the group sold that stake for $29.7 million. The gain of roughly $4.7 million is less than a tenth of a single quarter's amortization charge.

What the stock costs — after the sale

This is where it gets interesting, because the sale has fundamentally shifted the valuation. All figures below use 36,835,400 shares outstanding as of May 4, 2026, taken from the cover page of the quarterly report, and a closing price of $51.60 on July 24, 2026. That gives a market value of roughly $1,900.7 million. We use that as a dated valuation anchor, not as a price forecast.

The cash. The pro forma balance sheet as of March 31, 2026 shows $1,676.7 million of cash. Against it sits $867.1 million of debt: $460.0 million of 4.625 percent senior notes due October 2030, $263.1 million of 3.625 percent convertible notes due March 2028 and $149.1 million of 1.75 percent convertible notes maturing on November 1, 2026. That leaves roughly $809.6 million of net cash — 42.6 percent of the entire market value sits in the bank.

The book value. Pro forma equity of $2,404.3 million equals $65.27 per share. At $51.60 you are paying 0.79 times book — the market values the group below what is arithmetically inside it.

The revenue. Subtract net cash from market value and enterprise value is roughly $1,091 million. Against pro forma 2025 revenue of $1,220.5 million that is 0.89 times sales. For a media business running close to 86 percent gross margin, that is not expensive.

The earnings. And here the pretty arithmetic stops. A price-to-earnings ratio on a continuing basis cannot be formed, because continuing operations showed a loss in all three pro forma years. Against pro forma 2025 operating income of $104.9 million, enterprise value is 10.4 times — solid, but measured against a result of which nothing remained after interest, taxes and amortization.

The professionals' view fits the picture: the average analyst price target in our data set as of July 24, 2026 stood at $49.40 — below the price at the time. The stock had already staged a strong recovery by then: from a 52-week low of $26.51 up to within 5.1 percent of the 52-week high of $54.38.

One more metric for balance sheet quality. The Piotroski score tests nine features of healthy balance sheet development. Our own recalculation of 2025 against 2024 gives 7 out of 9. Six out of nine would be okay but not good; seven is respectable. One of those points, however, is a pure accounting effect: it counts because long-term debt fell — in reality only the $149.1 million convertible note moved into current liabilities, while total debt was essentially unchanged at $866.5 million against $864.3 million. Counted honestly, it is 6 out of 9.

By the way: since August 2020 Ziff Davis has repurchased a cumulative 13,516,973 of its own shares for $755.3 million — an average of $55.88 per share, above the price on July 24, 2026. The 2025 vintage, at roughly $35.72 per share, was well timed by contrast. How a company handles buybacks often says more about management than any presentation, a point we covered in more detail in our analysis of Xerox.

Opportunities and risks at a glance

What speaks for Ziff Davis

• Cash in abundance. $1,676.7 million of cash against $867.1 million of debt in the pro forma balance sheet as of March 31, 2026. The $149.1 million convertible note maturing in November 2026 is a bookkeeping event, not a problem.
• The group generates real cash. $407.1 million of operating cash flow in 2025 and $287.9 million of free cash flow after capital expenditure — the third increase in a row.
• The valuation is sober. 0.79 times book and roughly 0.89 times sales on a pro forma basis, using the closing price of July 24, 2026.
• The share count falls reliably. From 47,269,446 on January 1, 2023 to 36,835,400 on May 4, 2026, down 22.1 percent. On February 22, 2026 the board added another ten million shares to the authorization.
• Health & Wellness is growing. Revenue of $402.4 million in 2025 after $362.4 million — up 11.0 percent, on operating income of $89.4 million.

What speaks against Ziff Davis

• Continuing operations were loss-making. Pro forma losses of $9.8 million in 2025, $1.8 million in 2024 and $14.0 million in 2023. In the first quarter of 2026, another $0.8 million.
• Growth only with a checkbook. $83.2 million of incremental revenue from 2024 acquisitions against $37.7 million of total growth; the comparative table in the annual report shows 2024 down 3.3 percent against 2023.
• Goodwill remains an open bill. $540.0 million sits in Cybersecurity & Martech, whose operating income halved to $28.6 million in 2025. That segment already absorbed a $17.6 million impairment in the same year.
• AI attacks the business model. The company's own risk report names falling online traffic explicitly. The suits against OpenAI and Google are open with no timetable.
• The best-known brands earn the least. Technology & Shopping, home to CNET, PCMag and Mashable, produced only $9.3 million of operating income on $356.6 million of revenue in 2025, after two loss-making years.
• The sale was not pure upside. The pro forma statements put $181.7 million of tax on the $874.2 million book gain.

A human conclusion

Back to the receipt from the opening. It is accurate — it simply describes a company that no longer exists in that form.

With this sale Ziff Davis did something many groups avoid: it handed over its most profitable building block and took cash instead. You can call that smart — the price was high, the money is real, the balance sheet is in excellent shape afterwards. You can call it dangerous — what remains are advertising portals in a market where AI answer engines are starting to take the click away from the human.

What you should not do is keep reading the old receipt. That $47.4 million of profit for 2025 belongs to a group that owned Ookla. Today's group has $1.68 billion in the bank, a book value above its share price — and three consecutive years in which the remaining business earned nothing at the bottom line.

The decisive question is not in any report yet; it is still coming. What does management do with $1.68 billion? Buy the next twenty websites? Buy back stock while it trades below book? Or let the money sit and lose value? The first solid answer arrives with the next quarterly report — the first in which continuing operations have to stand entirely on their own.

What you make of that is your decision. And that is exactly as it should be.

Sources

• Ziff Davis, Inc. — Annual report on Form 10-K for fiscal year 2025, filed February 24, 2026 (SEC EDGAR, CIK 0001084048)
• Ziff Davis, Inc. — Quarterly report on Form 10-Q for the period ended March 31, 2026, filed May 8, 2026
• Ziff Davis, Inc. — Form 8-K/A, Exhibit 99.1 (unaudited pro forma financial information after the sale), filed June 22, 2026
• Ziff Davis, Inc. — Form 8-K reporting completion of the sale of the Connectivity division, filed June 17, 2026
• Ziff Davis, Inc. — Form 8-K on the securities purchase agreement with Accenture, filed March 4, 2026
• Ziff Davis, Inc. — Form 8-K on first quarter results and the annual meeting, filed May 8, 2026
• Source: fundamental data & SEC filings (annual and quarterly reports, 10-K/10-Q); price, valuation and ratio data as of July 24, 2026
• In-house stock scanner "Turnaround candidates", "KCF ranking" and "K-FCF ranking", measured July 27, 2026 on both brands

Journalistic analysis, not investment advice. This article is not a solicitation to buy or sell securities and does not replace individual advice. Stocks can fluctuate substantially; a total loss of invested capital is possible. All figures come from the original documents linked above and carry the date stated with them. The author holds no position in Ziff Davis, Inc. at the time of publication.