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Ziff Davis (ZD) Earnings and Revenues Improve Y/Y in Q4

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Ziff Davis (ZD - Free Report) reported fourth-quarter 2021 adjusted earnings of $2.17 per share, which improved 0.5% year over year. The Zacks Consensus Estimate was pegged at $1.97 per share.

Revenues of $408.6 million increased 10.4% year over year. The Zacks Consensus Estimate for sales stood at $405 million per share.

Top-Line Details

Subscriber revenues (32.8% of total revenues) climbed 15% year over year to $134 million. The growth in subscription revenues can primarily be attributed to growth in Ookla and Ekahau offerings. The company witnessed a significant boost in subscription revenues due to the acquisition of The Moz Group.

Advertising revenues (64.4% of total revenues) increased 7% year over year to $263 million. The growth in the advertising front was primarily driven by health and wellness properties, where the company experienced strong demand, specifically from pharma marketers.

However, Ziff Davis has faced a deceleration in top-line growth in the fourth quarter due to tough competition during the strong online shopping season and the introduction of the ninth generation of gaming consoles in the year-ago period.

Ziff Davis, Inc. Price, Consensus and EPS Surprise

Ziff Davis, Inc. Price, Consensus and EPS Surprise

Ziff Davis, Inc. price-consensus-eps-surprise-chart | Ziff Davis, Inc. Quote

Operating Details

In terms of expenses, adjusted sales and marketing and adjusted research, development & engineering as a percentage of revenues increased 310 bps and 30 bps, respectively, year over year. However, adjusted general & administrative expenses contracted 270 bps on a year-over-year basis.

Adjusted EBITDA margin contracted 130 bps on a year-over-year basis to 39.5%. Adjusted EBITDA increased 6.8% from the year-ago quarter to $161.6 million.

Balance Sheet and Cash Flow

As of Dec 31, 2021, Ziff Davis had $ 1.05 billion in cash and cash equivalents compared with $567.2 million as of Sep 30, 2021.

Free cash flow was $59.1 million as of Dec 31, 2021, compared with $110.5 million as of Sep 30, 2021.

Guidance

For 2022, Ziff Davis now expects revenues between $1.497 billion and $1.535 billion.

Adjusted EBITDA is expected between $538 million and $555 million.

Adjusted non-GAAP earnings are expected between $6.52 and $6.79 per share.

Zacks Rank & Stocks to Consider

Ziff Davis currently carries a Zacks Rank #3 (Hold).

Ziff’s shares have fallen 2% against the Zacks Computer and Technology sector’s growth of 1% in the past year.

Some better-ranked stocks in the same sector are Analog Devices (ADI - Free Report) , Veeco Instruments (VECO - Free Report) and Agilent Technologies (A - Free Report) .

Analog Devices, Agilent Devices and Veeco Instruments carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Analog shares have returned 4.4% compared with the Zacks Computer and Technology sector’s rise of 1% in the past year.

ADI is slated to report first-quarter 2021 results on Feb 16.

Veeco Instruments shares have rallied 29.6% in the past year.

VECO is slated to report fourth-quarter 2021 results on Feb 16.

Agilent Technologies’ shares have surged 4.4% in the past year.

Agilent is scheduled to report first-quarter 2022 results on Feb 22.