Ziff Davis (ZD) Q1 2026 earnings summary

Executive summary

• Entered a definitive agreement to sell the Connectivity business for $1.2 billion, now classified as discontinued operations and excluded from segment reporting for all periods presented.

• Q1 2026 revenues from continuing operations declined 1.9% year-over-year to $267.6 million, with adjusted EBITDA at $63.4 million and adjusted diluted EPS at $0.73.

• Operating income from continuing operations dropped to $2.9 million, and net loss from continuing operations was $(0.8) million.

• The company is pivoting to active asset monetization, significant share repurchases, and value-creating transactions to unlock shareholder value.

• All financial results and discussions reflect continuing operations, excluding Connectivity.

Financial highlights

• Q1 2026 revenues from continuing operations were $267.6 million, down 1.9% from Q1 2025.

• Adjusted EBITDA was $63.4 million, down 11.2% year-over-year; adjusted EBITDA margin declined to 23.7% from 26.2%.

• Adjusted diluted EPS was $0.73, compared to $0.77 in the prior year, aided by share repurchases.

• Free cash flow (including discontinued ops) improved to $(3.2) million from $(5.0) million.

• Cash and cash equivalents at quarter-end were $519.7 million.

Outlook and guidance

• Q2 2026 revenues are expected to decline at a slightly higher year-over-year rate than Q1, with similar margin pressures.

• The company aims to return to year-over-year revenue growth in the second half of 2026, with Q4 expected to be stronger than Q3.

• Adjusted EBITDA margins are expected to improve in the second half, approaching late 2025 levels.

• Fiscal 2026 guidance is deferred due to ongoing portfolio review and the pending Connectivity divestiture.

• Proceeds from the Connectivity sale will be used for capital allocation and general corporate purposes.