Ziff Davis (ZD) 8 Aug 242024 Q2 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Ziff Davis Second Quarter 2024 Earnings Conference Call. My name is Paul, and I will be the operator assisting you today. [Operator Instructions] On this call will be Vivek Shah, CEO of Ziff Davis; and Bret Richter, Chief Financial Officer of Ziff Davis.

I will now turn the call over to Bret Richter, Chief Financial Officer of Ziff Davis. Thank you.

begin. may You

morning, investor Good welcome the to Thank call everyone, for Davis conference QX Ziff you. and XXXX.

Chief which I'm on the website. button on viewer on you As the Officer presentation will by you the presentation and Financial for expand today's Richter, launch Bret side, Vivek call. to allow our this is joined of A available operator mentioned, of I Ziff am our webcast, Executive is Shah. A Officer, copy slides. the the Chief available When there a right-hand is Davis,

of If through you have the www.ziffdavis.com. not press website corporate you received it a access copy may at release, our

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you at time procedures formal asking the the that questions. we'll for completing a presentation, instruct Q&A. conducting regarding After will be The operator

you to can questions e-mail addition, investor@ziffdavis.com. In

Before prepared we safe to harbor read me the allow begin language. remarks, our

you As may webcast include results. results statements forward-looking call Such actual the cause anticipated to statements. and would the know, this that from materially differ risks will involve and uncertainties

proxy those uncertainties as part XX-K risk in and factors include, as the not we risk to, language additional webcast. as well forward-looking as have limited slide have of included we statements. show refer to filings, that filings factors well SEC that and of XX-Q various regarding discussions recent filings, X-K including harbor our documents risks filings, but our are safe as you the Some We statements the for in those disclosed

supplemental measures their statements non-GAAP our following to materials, are business equivalent. including GAAP addition, outlook reconciliation our In slides nearest for

remarks. call for the turn Vivek me his let to Now over

Thank you, and Bret, morning, good everyone.

expectations. down dragging financial total down the X%, were in year-over-year. results particular, revenues, quarter June second X.X% were quarter's revenues below our Our soft,

XXXX. performance the we to disappointed step we are after in in have second driving will post of X.X%, confident QX focused on solid which revenues we're by growth we're taken improved half and back grew highly financial While a that a

Our substantial with Media quarter. first segment The most back to Digital the media do to in tech swinging the second versus had change revenue was flat quarter negative.

has QX. growth. know, past As we in in advertising didn't of the that X the it all the is sustain modest while side with showing declines noting the QX, worth tech on saw better consumer you of It challenged growth been years. the the part And side BXB business for

most quarter the quarter's change came last our The segment, substantial in this X.X% and to which swung growth Cybersecurity in Martech quarter's decline. from sequential X.X%

QX impacting year. QX note in did and which Absent the We that what with the the decline QX XXXX. negatively featured in such timing some timing Martech experienced remainder of impacts, we Cybersecurity are benefits, line was in

our our we from business, slower see segment year reduced particularly positive has to trends, flat While to full progress anticipated. in continue this We've e-mail in other been than single-digit for expectation low businesses our decline. revenue

weakness, expectation guidance reaffirming and QX's with based Media growth and on are Digital growth, we connectivity gaming, of Notwithstanding accelerating health at wellness. segment the

range. That share growth. In the back guidance put single-digit year-over-year represent and path end EPS be would we to adjusted accretive acquisitions closer bottom-line of to strong growth and addition, between the high high to EPS buybacks, adjusted our on expect us

allocators. company judicious been at and the this From savvy in arrived we I XXXX, time capital have

$XXX we on acquisitions. have of And in We systematically deployed first over adjusted bottom-line my and average compound million EPS. deployed programmatically an year and per capital years, to our our X

creation which less terrific we've we been been our At past value relatively believe few shareholder discipline the Consensus same active. over but always have we our time, of of acquisition patience were represented focused years, our the XXXX, In And approach. on and limited program. spin-off the hallmarks business,

to market M&A started cool. rapidly the Then

to ourselves is we to nothing in the capital a to deployed time we nearly comfortably decisively in less act dry M&A accumulated in for position So not We force XXXX, Instead, right. and when transact. put even did powder XXXX. ourselves

where believe we prices taking now our time We align that our discipline. portfolio that becoming that are are the is with action. assets best And with available at fit

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to grow to We from our traffic, cash We're flow. monetization platforms, Davis Ziff welcome and excited to people and family have the the CNET colleagues know-how free soon.

priority that share, attractive our buying current it Ziff to believe one allocation, remains in the most at opportunities of when price the we M&A While per our comes is market. Davis capital

additional QX, active buyers QX. to million us more As expect increased deployed allowing than we X in repurchase to be a our shares, of our authorized result, Board buy X.X and million $XX shares in to million back program, buyback shares

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of and generate results percentage in time not We to us domains the lion's did search Overview the analyzed of times X%, similar meaning engine the industry searches thousands include share percentage AI by indicate overall for AI an most. our a our of Overviews. to organic Overview referrals resulting that the that queries fell experts XX% key of an other of page AI search the Analysis that queries matter across appeared. It

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provide with an our you efforts. me update on Let ESG

actively continue we our track are science-based meet with emissions suppliers reduction We ensure to our to on targets. XXXX work largest to

existing and detailed to hosted signing questionnaire all We our of webinars, suppliers a survey, report, a complete have climate done or ESG require ESG contract. sustainability new now educational a and renewal shared upon

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hold our employees. ESG vehicle are overall part they targets because science-based accountable S&P addition, the Assessment, we've in for to the In working CDP communicate strategy we us leadership marks been participating participation. customers are to efforts a and Corporate These this investors, summer to both Sustainability disclosing Climate and which us our our suppliers, actions of provide to our on time, first ESG and second year our of Questionnaire, further another and assessments which the crucial

our efforts unnoticed is we in MSCI Our July, AA have which gone pleased considered leader. not a were rating, and that, reiterated

were Just Leadership this to say, important from on the work week, of I'm front. we also the proud we Intelligence Award Sustainability to doing the are excited Business this Group. receive incredibly Needless

With that, the back Bret. let to hand me call

Thank Vivek. you,

our financial results. discuss Let's

periods. period, our both results. QX to $XXX.X commentary was reflecting Slide our for primarily revenues period, compared adjusted the of our financial $XX.X GAAP QX non-GAAP summary million million see QX adjusted reflecting million relate XXXX and prior EBITDA the year reflects will and with revenues release for for comparison earnings results $XXX.X X.X% a Please adjusted decline were the X the as My decline. of QX prior XXXX prior for a financial as with Our year compared results to XXXX. $XXX financial XXXX of X.X%. million

quarter in QX adjusted reported adjusted with margin compared the Our of EPS for quarter second was as of $X.XX We $X.XX EBITDA XXXX. XX%. diluted

a first that revenue enacted our to would When we number to reduce the of During similar the our performance growth we XXXX. second QX our our of late enhance for spending outlook and margins. in an quarter, immediately call, our quarter quarter expectation initiatives be QX changed expressed businesses earnings

their our not results, we half did to XXXX. full second in actions those benefit While the expect of significantly realize second impact quarter

of grew months diluted declined by X.X%. X first compared with XXXX and the were EPS through X%, slightly Overall, revenues adjusted adjusted EBITDA XXXX, by up, as

and X of and performance Performance Marketing, the reflects and revenue X company's Marketing Licensing. X primary revenue, our X Advertising results. Performance and Slides Subscription Slide reflect summaries and for sources Advertising

XXXX period, by Advertising and Advertising QX Performance XX-month declined year while the and compared revenue revenue X.X% trailing Marketing prior with as X.X%. Marketing Performance declined

Media shopping continued segment The health to on second within Digital related that our our generation anticipated was factors BXB demand and of of call, quarter in businesses lower-than-expected as we as our and business. primarily XXXX services part the the QX by our reflects discussed business, growth gaming impacting entertainment well decline a the technology This within lead number second campaigns. in quarter our for impact offset

quarterly XX-month second period. close more revenue per Marketing XXXX. Davis prior QX as for retention, and XX.X% was the per fewer to Performance Our at average net compared had with Advertising X,XXX customer reflects In advertisers, with customers This revenue Ziff statistic, of a annual $XXX,XXX. advertiser the year an revenue higher an than trailing quarter, average

of Licensing but $XX.XX, sequentially increased increase similar metrics part instances, depicts includes X grew year sequentially, Subscription and X.X% year-over-year X revenue. compared last an QX the the X churn Licensing XXXX to BXC both during reflecting quarters. in and customer Slide bottom period. and revenue Subscription last Subscription Customers in XX revenue in months. average our table prior quarterly of grew Licensing Subscription year and on the level reflected and the quarter. Licensing revenue declined X.X% the with grew The Slide a for and as both per prior subscribers. Revenue

$XXX,XXX contribution year-over-year, QX Humble approximately XXXX the publishing business. Games a other declined revenues our reflecting decline primarily from by in

the quarterly the and within business X organic in growth in quarters. with the corresponding definition revenue in that of divested company month year's under of asset prior rates the through current from the company which quarter total full comparable Similarly, for the against an well as first period. the ownership disposal the beginning from the excludes last organic revenue full from provides the the company year includes as compare can year. X revenue its of revenue acquired Slide The prior the month month assets

X%. second on XXXX declined the slide, depicted organic As quarter revenue

half to metric of the this improve expect in We XXXX. second

balance Please we refer X discuss to our sheet. Slide as

of end $XXX had the XXXX, QX of of cash investments. equivalents and As $XXX million of cash we million and long-term

a We gross basis. also capacity have both on leverage net significant and leverage

facility. of the we the announced credit quarter, availability under revolving During expansion our the

availability, extended million of Our been has the maturity revolver of now credit $XXX the XXXX. of has revolver to June date and

shares. stake just to this To the in had further the anniversary CCSI Prior shares million plan liquidity, our Cloud divest consistent with we to enhance we remaining to Solutions, X over quarter, these prior during the second our sold fifth spin-off transaction, our Consensus transaction. of

first our during quarter we indicated repurchases resumed our of call, during As stock. the quarter, second common

million a remaining in stock stock of the At our quarter, expire of common X.X of was had for quarter, end due approximately which $XX second authorization, second shares million. under to XXXX. we cost the approximately X.X our shares the August During of repurchased million we repurchase

However, mentioned, date repurchase to million shares XXXX. stock extend Board current for increase August our X expiration the of repurchase, Vivek to this shares as million our has authorization acted and to available approximately authorization by X.X

including all Net was second quarter, activity, our net was of end financial months of X.Xx value X.Xx as this the the our trailing adjusted of the and and gross XX of X.Xx leverage leverage investments. EBITDA,

notes in paid in XXXX. due issued cash convertible exchange In X.XXX% million we of X.XX% $XXX million convertible July, million aggregate XXXX, and notes $XXX.X $XXX.X approximately of for new due an of our

million, gross with million our amount the shares our debt. the convertible conversion of premium outstanding attractive $XXX X.X the by result more As by able the of to were obtain, transaction, of maturity than shares. of total reduced million $XXX debt underlying And debt rate number we a we outstanding extended our we this reduced of

forma our debt XXXX, million, total XX, Pro less than as Xx. leverage and ratio of was $XXX gross June was our transaction, this for outstanding

support We creation. long-term value XXXX been deploying actively to have capital throughout goal our of shareholder

in M&A has Our several investments is than been pending activity it and in closed higher years.

repurchased have significant borrowing gross X.X our shares stock portion reducing and convertible debt our of X.XX% of notes, paid down We a creating capacity. our incremental million and

revolver our and of majority maturity both expanded outstanding significantly securities. our convertible the the also of capacity have our extended and We revolver

We done this attractive maintaining sufficiently, and have terms. achieving

balance equity investment resources. the investable turning our We additional into monetized CCSI also of stake, an liquid

and our balance Our stronger. steps be strategy, strong balance these foundation the sheet continues our allocation to sheet make of capital

opportunity EPS repurchase our Going are to account reflected transactions levels continue stock the to EPS at believe adjusted of M&A intend implied such that repurchase in our shares ratio the forward, what seizing by the quarter. appear does strongly favor not We as to attractive we plan current third pursuit guidance. adjusted CNET, to while our price accretive as to growth indicated we continue our take into in common the to valuation to in

XX. Slide to Turning

reaffirming we are year February XXXX We that the fiscal in range presented guidance XXXX.

XXXX, comparable as This While current noted, not quarter expectations up met our pending guidance acquisition of our February recent the with second the the our year-to-date supports of expectations, that CNET the combined performance we and impact balance fact, is compared cost of revenue of of this as reaffirmation in slightly expected range initiatives, our our XXXX has revenue the period. with year. we set for

guidance, we revenue. fall to adjusted planned performance is range performance, the and EBITDA our which our within and than our this recent fiscal XXXX level by bolstered EPS expect of adjusted year a repurchases, Within stock higher diluted

are shows Including quarterly transactions, performance while expectations the the we improve expect anticipated M&A represent for of company And in QX providing the not Advertising was senior that the impact seasonality original its the in and and fourth of our we our the XXXX results guidance XX% you to of XXXX, revenues. our strong transaction businesses, second approximately of Marketing other typically and remind XXXX, for particularly Performance we half fiscal quarter. QX for that to currently year specific balance

improve, We expect if not to the CNET of percentage. acquisition this support,

second the half cost margins We initiatives of impact also positively in recent our to expect XXXX.

a flow includes reconciliation was Year-to-date cash $XX.X free cash of flow. XX Slide million. free

TDS. includes However, of flow million free this associated negative figure $XX.X cash with

on annual maintains And expect free to first experiences As cards, working XXXX seasonality. an TDS, reflects cash significant be large an flow at while usage position the gift issuer half working basis. contributor capital a TDS a to of we TDS capital of and

free of was the flow Excluding $XXX TDS, million. cash impact year-to-date

for second stock portion of enhance investable of and below we while balance Overall, second to during while took expectations, XXXX. our sheet for were several our We remain results our quarter to optimistic significant a outlook our allocated steps our balance quarter, strengthen resources our the the we repurchases. liquidity important

pending unexpected to half some shareholder revenue QX, M&A Despite improved will of XXXX. Our to the deal-making the can believe see during second and an in in that future. challenges allocate and opportunities we environment, believe of we growth we earnings reflects we CNET capital deliver near enhance and more acquisition value

I you to that, queue us With now rejoin how operator to for instruct the to ask would on questions.

is And from the today [Operator first Shyam question coming Instructions] from Patil SIG.

aggressive the on Congrats list I CNET more sounds beginning company time. becoming the for with this Vivek, deal. the M&A. know be been the that's just a on could long it like of

wondering share you the you're in further where the Just if see areas term? most particular M&A could your and strategy about are color on you near thinking there how of any if opportunity any kind

great perspective in what we're me let start and listen, seeing M&A color the market. And some No, giving question. by Yes. just on

of So I height thing time more think as of market between the sort valuations, expectations. think is, time elapses first I the softens

we're certainly so And seeing that.

since So years of it's and advertising software-based peaks. businesses media XXXX, digital few a at been a lot were and their the

seeing, reported, and seeing, pressure been And firms The a capital really opportunities going to think think, capital. is LP we're that that we're private see, interesting are thing to of that. I and from degree start has there's as this of return I emerge widely, pressure equity think we I mounts, to return second good on

holdings, activity. also in in and fit think terms environment, to as this rate of catalyst interest that some for equity terms in that some situations, a this leveraged. the And think come be you businesses can might I portfolio are I subset bear, have private highly

mean. does market over and AI angst and the lot and businesses, around then advertising mean what that content And a I think what for just there's angst AI duopoly does of

believe leadership exceedingly clear well. advertising, on very premium content brands that and do view a have We and

those going some lean into And of to so concerns. think we're I

that position go verticals: we our services leadership then, point entertainment, our Cybersecurity subscription and M&A These from And our we into. businesses. health And categories so, Ookla businesses retail, adjacent assets look, think in like and want looking look, wellness. business, also I our Martech to strengthen are technology, gaming view, of that, an deeper like want core and for

verticals board, are eye that new an there the verticals always keeping across So table, the on on. we're always and are high-value

type feel you've is. about with which M&A and I it where CNET, look, of correctly, of And These think our are these do, that the do view think very to the actually Network believe Gamer said, that kind we deals those are type we now to love starting of as with is I deals market the we do as are So interpreted and bellwether. way. I I optimistic come

next question The is from Carpenter coming from Cory JPMorgan.

Vivek, and Bret. one for you one for

this connectivity, gives For gaming, you in Could have you in seeing what and for and market just broadly, Vivek, what season? more this, the wellness you're you expand mentioned more in to maybe mixed second on reaccelerate half. earning where the health expectations you been trends advertising confidence

mentioned And for I'll Bret, I'll you, then -- that, answer ask you let a and you sorry, follow-up.

Thanks, Cory.

Sorry.

think So X%, revenues, this EPS up of at maybe out first half in look up around in for we X.X%. look, year, zoom the a When I moment. slightly

would where to So not we be like exactly at this point.

said, teeth. a we okay. all As of the things in considered, was But a bit June kick reasonably

at look are half, modest the organic benefits second improvement. we As

coming meaningful And traditional always in big So good wellness, bets calling connectivity. and we're Gaming, that of and for not health areas us. have been they're growth sources for here.

help the part we second margin show institute Bret is expanding which view point the measures of opening so will his from margins, in this number Cost of half. did up the to of in that control, mentioned remarks, a

do second then material we're to contribution is what forward. the half M&A going from looking and And to in the

EPS we who the know guide. I that's in that EPS to for that the going shouldn't the company very followed long think much high adjusted view end that And very be lost, end, Those then of think important. the towards is have I guess, as think get ourselves we're we a And I time, compounders.

and say the broken it's one In well, of I'll types market, usually a things, types. ad because few it's, it's say and market, not into advertising terms customer categories product I

I and It's us, think By challenge companies will right a taken that's longer but we [indiscernible] side. We've had performing. to in seeing than reflection hoped, the of and up I way, that I to would that the Consumer second BXB again, continues those across think, believe that's be half. reasonably campaigns wellness the for continues everyone turn. done are has tech loosen how tech one it's well. It's Health now advertising. that cyclical, a But For unpaused, well. on getting We're we advertiser have board. into do and major BXB believe the there. pharma

So good again, there. very

but interestingly, advertising has some business hasn't entertainment, been gaming industry and in the our reflected turmoil, that. Gaming

how able than industry been little publishing a performing. to we've gaming sort of, think, So the differently I has been perform bit

positive. that's a been net So

we and then And talked strong. issue, issue, had we the in our about which is retail retail, last actually, the in about just call. We commission last talked distribution in which the call,

has I zooming So at XX look, when ago. months, probably ad look worth recognize most, business business it all better relatively again, to I end, the is our think it's that months than the in up thing out other with healthy. And held XX our

our And don't it as over to dramatic others, going as maybe longer so comps maybe it's probably some seem time. a period at but of look percentage-wise helpful forward

that a or more it do the follow you more macro Just kind think curious of your to time. there color specific helpful. would businesses? just pullback what In related, same across happened couple the what June, to And more verticals at caused up. happened be Is of

macro. I Bret. the it's it on wouldn't Cory, put Yes.

things of is high characterized the we one that think are customer business sort as have a I of we concentration.

thousands where sales about movement campaign campaign to out we've have amount the the amount And a got again, of some roughly BXC take the of X,XXX on tremendous accounts can ad a a business, doesn't customers. It move either cancel QX or part our of dollars. from large to take QX. a stuff in we you subscription If to customer hundreds if business, of think of customer you

licensing revenue on We've Depending that that's winning contract even sort and basis. got recognized recognized certain the timing life a is over have on different it revenue and a types even the onetime of of contract, can also certain impact those licensing losing subscription of the quarter. of side. on contracts We revenue, or

as And Vivek had the and we investment the said the across our By a perspective. will May, and prepared had the the of back in QX, in impact, again, I remarks, half different of to we part business in I our is timing end QX. the more part of We our against expected incoming than on said action year. balance a revenue. balance think marketplace. when spoke perspective we took again, of this of year But front the of the customers in the just successes large Those

is Sandler from Barclays. next The coming question from Ross

X Just questions.

CNET. First, on

was somebody go forward. that it that it great day, we'll to public in when be actually talking As the back hear covered company about

on advertising high-level might go-to-market and within some thoughts just accretion the this vertical, consumer overall maybe tech that how So tech help vertical?

other the And to companies forward? question, conversion still should go it right about XXs, mid- and think way metric new is high cash to coming then given into that the fold? think your the of these How we about second that flow long-term free TDS the

and we're you're ages. that as that glad public around revealing Thanks, remember too. I Ross, similar company, seeing a I'm probably

process. it, I we're HSR have a somewhat the to and to go say not signed. through me few We're be Let We've closed. careful. things got about Obviously,

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And it's then what I about, today I'll how see talk guess, ad evolving. how I market and more the broadly is

players every that marketers position about the viewed premium in have and amount digital And Those deals, we're one For areas. and vertical, a to in now, of budgets, of that few search direct are you are players positioned big their I'm a every how attractive I believe But in. ad significant the to on sure, at-scale we're deals. a programmatic. in be talking are spend and X do social premium that's trying verticals ad budgets

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for it's And the So for that we question. cash let signed about it. flow Bret is frankly. fact years, have brand talk a we're the that very excited many thought I'll super agreement, -- that is It think, compelling. conversion we've to this free I

think, our I foremost, maybe and that sort bit. little first Ross, is yes, Yes, of long-term But target. a unpack it

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buildup talked a capital. of of had XXXX We out dynamics we working business, some the in coming in about

the but back stabilized clawing the we've balance we're sheet. on of I some still situation, that think buildup

builds of is the amount do has a a end seasonal some that contributor. into and nominal And quarter. of quarter. fourth year, fourth up it's the concentration the of towards negative then runs acquisition, we business had its second it impact the had a built half acquisition. to TDS of at the out in business. And in out cash first of up Relatively the the the outflow the in happen highly cash It it as the And of dynamics expected quarter being We impact small first on experienced anticipate The with that in the quarter. get a customers. we the back significant we'd the year quarter, TDS running

think that rate our for is target conversion business. I the again, But

also We it. should have, positively Games basis, Humble that expected on a investment smaller go-forward in impact

get our plan to those back to yes, levels. So is

is from The Evercore Jian ISI. from next coming Li question

Great. questions. couple have AI-related I a of

all color share by driven discernible your any adoption appreciate definitely -- the just publisher seeing the in of assets side to by first, Overview? Overviews at specifically, So search, But are Ziff like AI around AI the general. to Davis for impacts publisher Google your of you the traffic

also mentioned What can user assets. several we of If you more interesting tools kind P&L -- side? seeing impressions? the how be Is should are see you where terms in of impact? these the driving and talk your can monetized of this of about the And on GenAI you second, kind engagement some on it across

No. Yes.

So great question.

the queries, themselves actually site everything AI to to continues impacts say against other your respect which only is for first I more your links the is looking are queries a I Overviews I any matter actually I additive analyses as to from low the organic organic overviews also piece at done quite us. to because, search AI will Google actually that is AI quite positive that On think it's presenting what rate reduce. it themselves, above of be search present But with else. seeing when it's no, said, low elevating all search, we've broadly, and overviews experience. But in which say, across we're the where queries I'll not because it's to think to And overviews as also the is

is presenting are the Overviews of at way now the the search. they're AI right top So

it some in is been not it's frequently, that we as So overview. where Overview imagine happens, happening when which ways, but And to actually it's SAOO. can a net if a something interesting, world go I AI positive or viewed SAIO, that in think, SEO from it's you're I the

not a So look, that, think I factor it's end, in now. the really right

search focused think that other than starts emerging What publisher the create they is search for any of publisher traffic see view that this, which opportunity degree on engines. have is to, I engines spoke instance. a result I to [indiscernible] say. maybe think from an will too ad for delivers may Google Way say other I part early search much engine the content engine very also those how as competition I to which to page content, search that are more because a to

that So such eat But search, share. I to while, a for in Google position be market watch. great anyone it will really into a think, will in interesting to that take is again,

making the is actually AI offering question to, productive, And our hoped-for result think the improved much now, relating easier more expected it we what products, On that retention. our is second use, and subscription of I or offering them when right to around our in benefit? incorporate into making subscription should

make can to helps It! Lose we shifting Well, about app adherence and one when actually believe, the we entering like sort is drive consumption. your logging, retention which Lose talk big to So retention, food easier, voice revenue. of the of It! helps issues that drive an degree the in we in

some which some talked with the things within done for Again, Similarly, a about retention. respect look Downdetector, is think that the so to of of subscription I we've I changes service. we

I going it inventories guess days. session On would IGN load of media more change if dramatic that's I meaningful lead be tooling of side, for want with instance, leave And in more right, and AI a people to the the ad ad time, impressions, anyone business. you're to don't impression experiences content way. But to ad that are engaging, the very some with maybe the is in early content

I They're all, better software want are they AI to overstate I actually necessarily incorporated experience, user but trying think a contribute to think into think, is they're that. to think I compelling. experimental. don't I all I -- more

The question next Ygal Citi. Arounian will from be from

kind know that through CNET in organic revenue just half not size mix specific. that Maybe of I if we trajectory the broadly, within to and where the if maintaining kind particular, the the M&A of full you just back help and the but as what guidance first from maybe could between guidance that and Can the year. we to you are down back of year? the are going more work number break the from for don't expectations like

It say I we're cost against break going to is X improving don't What will control. I Yes. organic. margins things. think it the down I specificity. is in think that improving is it's It

in M&A. just more it's and the of So time, always it's contribution adjusted followed combination to probably the And that of instructive EBITDA think affects, those EPS. formula. the been those who a obviously, our I then X And -- for long things company for

like not we'd is organic it. where Look,

about can't believe of clear to be place And But it we a source believe, certainly is We a last modest over is, And months, continue. a let it's of it to going that's in So decline. be reducing continue decline. XX where the me that. we organic a is headwind. source

balance the flow, free a income, highly acquirer company cash the and flow, deployment net serial generation M&A, leveraging end, our capital of a been sheet, about being structure. accretive adjusted deployment very always -- cash compounder smart EPS free to has In of

hoping a second the to been the convey beginning We're we the today Ziff of the That absent, the been described few is, call. thing for real change believe at think, has that's there. of equation frankly, what last part we're firmly signaling reasons Davis think I part now I that is years for back. the I that has

half and that. And acquisitions make important. important about no to XXXX So are the to second important They're they're guide, mistake beyond.

a in QX the add expectation the business, pending our year. overall strong including of and And is quarter is for meaningful large is regard impacts, and M&A a of the company of the our we And and both of for existing to thing we the maybe the CNET. said, closing of on only the dynamics portion I'd based balance factored guide. as with the timing seasonally

sit there has the an impact given small QX, that where an So we of expectation in a a is QX, QX. on with beginning August, here probably but full impact on on impact

going stance here? Got about more Maybe then, have been LLMs? thinking front, Is that patient. you're the with it. back you your I the on and opportunities more Helpful. AI, approach updates And the guess licensing guys to and Vivek, to take how Okay. you any licensing continue to

have look, nothing Yes. report. I mean obviously, we to

dialogue. continue in to be We

that possibly becoming fairly and And I movers. not large large to these clear what's rag-style what is what the that to and what would copyright think deals and rather into compensation we think in before training They're in the for that was sort use needs is -- I needle recognition either use not and situation aren't isn't. And situation a fair get questions what are be think there's be to a where there seem they market, it, was around allowed a big. deals be of I the a original fair relate we marketplace. in

money is that So I what that near-term the I alone, of a companies, coming say what I'm I'd of meaningfully-sized duration, of training certainly guess we feel appealing and not that not training small It's that recognize appealing. concentration I think has category ongoing and high not this I'm against think the publishers. in in a is from been size subset fairly

we term. that now that think do say right very to to might all deals feeling that, compelled So in end, we're be short not the

actually search a referral of we'd to become we're some that think around of optimistic how more. that engines trying little build I movement to out And me. sources at that traffic, meaningful this the rather same time, interesting the is bit see plays

would productive. degree fruition which way come the any in can I meaningfully, to very to So to that be think that

deals distribution things happening that mix. and and does what relating search there are obviously, then -- deals, mean major And that sorry, search in to

interesting So I an to space, this think, watch. be will

being being little thing -- patient just for us. is I and probably think, waiting a a think I good

RBC. question is The Jaluria next from from coming Rishi

Rishi in And of to range? EPS to the rightsize go the growth to This reaching in base Can about just giving to match expense headwinds? actions is wanted for talk confirm, Jaluria. the took bit more end confidence on higher these you QX back the what Chris Fountain profitability. is actions, I you to a are that you the

Yes.

thanks So -- again the for question, Chris.

of of more just our to And or whether in build the our the capacity we go areas think it's positions in top keeping of pressure the continued that's where business open accelerated in open you longer term activity, into in to near constantly expectation potentially performance. investments hiring rebuilding against the other anticipation expectation an open future. in business is end, more I eliminating which see positions line the calibrating or with

and of buyback. the on we have combination anticipated, of the a it's And M&A. EPS -- existing close it's the impact our I obviously also share things. combination impact acquisition side, to think of M&A our a the of that's But pending again, the the

a I for important a sheet was So think period from of the this perspective. company very time balance

we've over back accumulated XX-plus months, look you cash. of If lot last the a

our half than less that our it with cost transaction in [indiscernible] the really million to second put work maturity, maturity for than on steps pleased X%. to And meaningful acquisition, We did on the puts into $XXX quarter we back really more a convertible of and convertible of that terms the a of the and that cash in third and Not coupon but down and and took lot buy quarter. we where X.X of terms to only paid million extend our outstanding. of us and shares debt we commit also attractive with

available And our through took we also our steps revolver. to capacity expand

to in stock. our but to a commit basis the continue not program, So expectation levels, quarter be on these in that gives our at is us go-forward our the to ability only active M&A to

Board steps Our our our support X buyback stock to by program under the shares. program by took availability million increasing

it's the the our to of short took allocating quarter allows look revenue you in to to And capital the commitment a we all statement the today. where we expectations businesses our our program. they'd together cost be, of make when So back actions in fell existing at then multiple M&A, year, working of that the our we the us where buyback thought expected steps of of impact the the EPS, performance half pending and made

question Tanwanteng Securities. Jon next from be will the CJS from And

closes? several was assuming I revenue and them talk maybe the to over high you the wondering level Ziff, to -- margin profile if how trajectories about at there, value and the acquisition change drive that compared years, and have you properties expect at similar could and very CNET last their you

if we're just be. but direct this More CNET been like continues don't this I revenue out again, affiliate heavy, period programmatic just just It buys. one, consumer is me But us. and -- has deals, ad sponsorship merchants balance a traffic to It leader it's deals, a don't breaking that has market, like video and we're -- say that not I broadly, plus getting in a still advertising not Again, direct driving is commission is in of affiliate closed, signed. advertising, CNET, to it's where and paid which not commerce, two, us. a let commerce

So ZDNet monetize or to and Mashable. kind of history go what to a BXB of very PCMag kind more we and how we focus and providence, has how which But of with that consistent Spiceworks model-wise, market well a does. matches

we model-wise, So think consistent of very and very structure, product of the much I consistent business much sort think the I engineering, business operate and today. sales, editorial, very kind profile-wise, we of very ad kind consistent understand very business cost that

over of us the of maybe just these the but like you X that compared private X to of be things so? earlier, -- to just like scope Okay. the Fair Can can next alluded size there's ago, a sounds enough. it for things or or you're there's and given us this and equity think And you more you timing for CNET to kind year seems how you similar how this behind seeing properties months lot mentioned. it many aggressive all you

we It's more. interesting about It's question. are an Yes. less seeing

discussions I shifted think we've It's always -- been where are believe have now of seeing these and lot. moved actionable. the nature a are we the to

the I point. think key that's

that is and it's closer has come I the where we to think point key spread bid-ask the narrowed were.

These particular very are these excited so I do valuations. to at are to think thing deals a that's understand. And key we

field conversations. are, wow, they like, a and and dialogue. not more that's It's valuation felt And having deal so be just statement were been volume are of It not there's we of than productive sort sourcing a has where and it's the to there, to a me, we not hard Because right? like and a sourcing I believe football statement. between always going

in able frame of a recycle -- productive. So to as we going of to going it's way often be to position into our hurdle a manage M&A EBITDA be and XXX% deals. to with return XX% talked that being capital listen, this, a we We being on think for those we're of free about think maybe flow just gross historically, cash-on-cash all of to a Xx, debt at with borrowings over acquisitions cash available

is period are statement, us is important That's this that of, And price this is Another XX-month an way after we we roughly it, often incubation Xx. that incubation never period, And now, purchase so look an XX it opportunities months EBITDA within call more let's framework. and to model at that's there within next over right? the that towards. what work fit changed, within that effective

Thank the you. There in Richter call remarks. Bret back closing are now no hand to to other questions like queue for I time, would the at this

the and at everyone, Paul. today. in you, you, Thank call interest you upcoming some We due a great appreciate conferences, support. joining post We day. we'll which Have course. our the our hope for of thank see to And

conference. Thank This today's conclude you. does

for Thank You may participation. have day. at your you disconnect wonderful lines time, and a this your