Ziff Davis Inc (NASDAQ:ZD) reported financial results for the fourth quarter and full year 2025, delivering a mixed performance that ultimately disappointed investors. The digital media and internet company fell short of Wall Street's top and bottom-line expectations for the quarter, leading to a sharp sell-off in its shares.
Earnings and Revenue Miss
The company's Q4 results failed to meet analyst forecasts on key metrics. Revenue for the quarter decreased 1.5% year-over-year to $406.7 million, coming in below the consensus estimate of approximately $428.9 million.
On the profitability front, the company's adjusted earnings per share (EPS) of $2.56 also missed the mark, falling 5.1% short of the $2.79 analysts had anticipated. This dual miss on both sales and profit drove a significant negative market reaction following the report.
Key Q4 2025 Results vs. Estimates:
- Reported Revenue: $406.7 million
- Estimated Revenue: ~$428.9 million
- Reported Adjusted EPS: $2.56
- Estimated Adjusted EPS: $2.79
Market Reaction and Price Action
The market's response to the earnings miss was swift and severe. In after-hours trading following the release, Ziff Davis stock dropped approximately 11.8%. This sharp decline underscores investor disappointment with the quarterly performance and suggests concerns about near-term execution and growth. The sell-off adds to recent pressure on the stock, which was already down about 22.7% over the past month.
Full-Year 2025 and Segment Performance
For the full year 2025, Ziff Davis reported a 3.5% increase in revenue to $1.45 billion. Adjusted EBITDA saw a marginal increase of 0.3% to $495.1 million, while adjusted diluted EPS inched up 0.2% to $6.63. The company highlighted its strong cash generation, with free cash flow reaching $287.9 million for the year.
A review of segment performance reveals a diverging story within the company's portfolio:
- Health & Wellness and Connectivity were clear growth drivers, with full-year revenue increases of 11.0% and 8.0%, respectively.
- Conversely, the Technology & Shopping segment saw revenues decline 1.5% for the year, including an 18.0% drop in the fourth quarter, acting as a significant drag on overall results.
- The Cybersecurity & Martech segment also experienced a slight full-year revenue decline of 1.9%.
Capital Allocation and Strategic Review
Management emphasized its commitment to returning capital to shareholders, deploying $173.8 million for share repurchases in 2025. CEO Vivek Shah stated the buybacks were executed "with the conviction that our share price does not adequately reflect the intrinsic value of our businesses."
Notably, the company provided no financial guidance for fiscal 2026. In its release, Ziff Davis reiterated that it has engaged outside advisors to evaluate "value-creating opportunities, including the potential sale of entire divisions of the Company." This ongoing strategic review process is cited as the reason for deferring guidance, creating uncertainty for investors looking for forward visibility.
Looking Ahead
With the company withholding formal guidance, investor focus will shift to analyst models for future performance. Currently, analysts are estimating revenue of approximately $1.55 billion for the full year 2026. For the upcoming first quarter of 2026, the consensus estimates project revenue of around $346.6 million and adjusted EPS of $1.39. The company's ability to stabilize its weaker segments and progress in its strategic review will be critical factors watched closely in the coming quarters.
For a detailed breakdown of historical earnings and future analyst estimates for Ziff Davis, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, an endorsement, or a recommendation to buy, sell, or hold any security. Investing involves risk, including the potential loss of principal.
