Ziff Davis (ZD) Q4 2025 Earnings Call Transcript

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Date

Tuesday, Feb. 24, 2026 at 8:30 a.m. ET

Call participants

• Chief Executive Officer — Vivek R. Shah
• Chief Financial Officer — Bret Richter

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Risks

• Management stated Tech and Shopping revenues are expected to continue a double-digit decline in 2026 due to lower search engine referrals for affiliate commerce, creating significant revenue and adjusted EBITDA pressure.
• Bret Richter said Q1 2026 adjusted EBITDA margins are projected to be about three points lower year over year due to “anticipated year-over-year decline in Tech and Shopping revenue, a lower-margin revenue mix at Health & Wellness, and the continued investment in growth at Connectivity.”
• The impact of declining high-intent search traffic is not fully offset by alternate channels in Tech and Shopping, as Vivek R. Shah explained: “the one type of traffic that really is hard to replace is high-intent consumers who arrive via search looking for a product or a service and then clicking through to make a purchase. That is the affiliate commerce and affiliate commission business.”
• Management deferred formal 2026 guidance because of the ongoing strategic review, introducing further near-term uncertainty for investors awaiting clarity on potential transactions.

Takeaways

• Revenue -- $406,700,000 in Q4, representing a 1.5% decline driven by an 18% decrease in the Tech and Shopping segment, partially offset by over 6% growth in the other four segments.
• Adjusted EBITDA -- $163,200,000 for Q4, a 5% year-over-year decline; full-year adjusted EBITDA was $495,100,000 with a 34.1% margin.
• Free Cash Flow -- $287,900,000 in 2025, up $4,200,000 from prior year; Q4 free cash flow of $157,800,000 rose from $131,100,000 in Q4 2024.
• Share Repurchases -- $174,000,000 deployed in 2025 to buy back 4,800,000 shares, reducing shares outstanding by more than 10% during the year and more than 18% since end of 2022.
• Adjusted Diluted EPS -- $2.56 for Q4 and $6.63 for 2025, with the annual figure up slightly compared to 2024.
• Segment Growth -- Four of five segments grew revenue in Q4; Tech and Shopping revenue fell due to search traffic declines affecting affiliate commerce and a drag from the now-divested games publishing business.
• Affiliate Commerce Impact -- $90,000,000 in affiliate commerce commissions from organic traffic in 2025, down $25,000,000 year over year, with half this drop occurring in Q4.
• Connectivity Segment Performance -- Fourth-quarter revenue up 11%, boosted by products like Speedtest Pulse and Speedtest Certified, both launched in Q4 and expected to contribute to growth in 2026.
• Health & Wellness Segment -- Achieved record revenue and adjusted EBITDA, with year-over-year revenue growth of 8.6% in Q4; AI tool Halo integrated into all pharma RFPs and driving improved campaign performance.
• M&A Activity -- Seven acquisitions closed in 2025 for $68,700,000 net; management indicated intention to remain active in acquiring high-quality brands across segments as opportunities arise.
• Stock Repurchase Authorization -- Board increased authorization by 10,000,000 shares, bringing total available for repurchase to 10,700,000 shares as of this week, valid through February 2036.
• Games Publishing Divestiture -- Sale completed in Q4 eliminated a $14,000,000 annual revenue drag in 2025, created tax benefits, and removed volatility from Tech and Shopping segment performance.
• Strategic Review -- Management confirmed an ongoing assessment of potential transactions to unlock shareholder value, with outside advisers engaged and formal 2026 guidance deferred as a result.
• Q1 2026 Outlook -- Expecting consolidated revenue growth to be flat or slightly negative year over year, and adjusted EBITDA margin to be three percentage points lower than Q1 2025 due to continued headwinds in Tech and Shopping and margin mix shifts.
• AI Content Licensing Discussions -- Management emphasized “confidence in the future revenue opportunities” and stated a commitment not to enter retrieval-augmented generation (RAG) agreements “that compromise [Ziff Davis’] rights to fair compensation for foundational training,” anticipating greater clarity following ongoing litigation.

Summary

Ziff Davis (NASDAQ:ZD) reported declining headline Q4 revenue and adjusted EBITDA, explicitly attributing softness to persistent challenges in the Tech and Shopping segment from reduced search-driven affiliate commerce. Management executed a full exit from the games publishing business, eliminating a segment drag that had contributed to $14,000,000 of revenue pressure in 2025, and realized tax benefits from the sale. Q4 marked the launch of Speedtest Pulse and Speedtest Certified, positioning the Connectivity segment for further expansion. The board’s authorization of an additional 10,000,000-share repurchase capacity sets up significant future capital deployment, though periods of inactivity may occur during ongoing strategic reviews. The company declined to provide 2026 formal guidance, citing current evaluation of potential value-unlocking transactions with external advisers engaged.

• Shah described a “mid-single-digit” long-term growth objective for Tech and Shopping, but emphasized the need to stabilize and reposition the segment following further anticipated declines in the near term.
• The Health & Wellness segment experienced a notable acceleration in pharma ad spend, including new GLP-1 campaigns and strength in Lose It! app subscriptions, supported by the rollout of the Halo AI-powered tool.
• Direct-to-consumer revenues from Humble Bundle and IGN Store approached $90,000,000 in 2025, highlighting diversification within Gaming & Entertainment.
• Management signaled ongoing, “principled” negotiation on AI content licensing and reaffirmed a refusal to sign retrieval-augmented generation agreements that do not properly value foundational content rights.

Industry glossary

• Affiliate Commerce: Revenue stream derived from commissions when users click through company content to make purchases on partner merchant websites.
• Retrieval Augmented Generation (RAG): An AI approach that leverages external knowledge or datasets to enhance generated content, distinguished by Ziff Davis as requiring separate licensing from data used for AI model training.
• GLP-1: Glucagon-like peptide-1, a drug class used for weight management and diabetes, with related advertising comprising an increasing share of Health & Wellness segment revenue.

Full Conference Call Transcript

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Operator: Thanks for holding. We appreciate your time and patience. Please stay on the line, and we will be back in just a moment. Good day, ladies and gentlemen, and welcome to the Ziff Davis, Inc. fourth quarter and year-end 2025 Earnings Conference Call. My name is Tom, and I will be the operator assisting you today. At this time, participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press 0 on your telephone keypad. On this call will be Vivek R. Shah, CEO of Ziff Davis, Inc., and Bret Richter, Chief Financial Officer of Ziff Davis, Inc.

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

Bret Richter: Thank you. Good morning, everyone, and welcome to the Ziff Davis, Inc. investor conference call.

Bret Richter: As the operator mentioned, I am Bret Richter, Chief Financial Officer of Ziff Davis, Inc., and I am joined by our Chief Executive Officer, Vivek R. Shah. A presentation is available for today’s call. A copy of this presentation and our earnings release is available on our website, www.ziffdavis.com. You can also access the webcast from this site.

Operator: When you launch the webcast, there is a button on the viewer on the right-hand side which will allow you to expand the slides. After completing the presentation, we will be conducting a Q&A. The operator will provide instructions regarding the procedures for asking questions. In addition, you can email questions to investor@ziffdavis.com. Before we begin our prepared remarks, allow me to read the safe harbor language. As you know, this call and the webcast will include forward-looking statements. Such statements may involve risks and uncertainties that could cause actual results to differ materially from the anticipated results.

Some of those risks and uncertainties include, but are not limited to, the risk factors that we have disclosed in our SEC filings, including our 10-K filings, recent 10-Q filings, various proxy statements and 8-K filings, as well as additional risks and uncertainties that we have included as part of the slideshow to this webcast. We refer you to discussions in those documents regarding safe harbor language and forward-looking statements. In addition, following our business outlook slides are our supplemental materials, including reconciliation statements for non-GAAP measures to their nearest GAAP equivalent. Now let me turn the call over to Vivek for his remarks.

Vivek R. Shah: Thank you, Bret, and good morning, everyone. Ziff Davis, Inc. grew revenues 3.5%, adjusted EBITDA grew slightly, and the company generated almost $290,000,000 in free cash flow. Given the headwinds that some of our businesses experienced, we are glad to have produced a year of growth, however modest. We deployed $174,000,000, about 60% of our free cash flow, in share repurchases throughout the year as we continue to view our own stock as a highly attractive investment. In the fourth quarter, we experienced a 1.5% drop in revenues and a 5% decline in adjusted EBITDA due to an 18% decline in our Tech and Shopping segment, offset by growth of over 6% in our four other segments.

Tech and Shopping’s revenues declined largely due to a drop in web search traffic, which had a meaningful impact on our affiliate commerce revenue. As a reminder, we earn affiliate commissions when a user clicks from one of our sites to a partner merchant site and makes a purchase. The highest-quality referral traffic for an affiliate commerce business comes from search engines, which are generating lower referrals for us. We believe we can contain the damage through alternative sources of engagement over time, as well as growing our video advertising and licensing businesses.

Vivek R. Shah: In fact, the CNET Group saw video and social views grow 100% in Q4 and over 80% for full year 2025 to 1,000,000,000 views. Gaming & Entertainment revenues grew 1.5% in the fourth quarter, consistent with its full-year growth rate. Humble Bundle storefront had its best revenue quarter in five years. Humble Bundle achieved a huge milestone in Q4, celebrating its 15-year anniversary and over $275,000,000 raised for charity to date. IGN Entertainment social growth and engagement continued in Q4, with Facebook views up 22% to 300,000,000 and views on X up 19% to 45,000,000. IGN Store, which sells collectibles and gaming-related products, saw its total sales tripling.

Between the Store and Humble Bundle, our direct-to-consumer revenues reached almost $90,000,000 in 2025. The Health & Wellness segment finished a year of record revenue and adjusted EBITDA with a strong Q4, growing year-over-year revenues 8.6%. Our AI-powered data activation tool, Halo, has now become a standard part of all of our pharma RFPs. Halo audience insights are used to inform campaign design to better engage target audiences, which leads to improved campaign performance, and it is all accomplished in a privacy-safe way. Our consumer health business grew due to increased ad spend from core pharma clients, including new GLP-1 campaigns, and growth in subscriptions for our Lose It! weight-loss app.

We believe that our Lose It! business is benefiting from the rapid market penetration of GLP-1 prescriptions, as it is seen as an adjunct therapy to promote healthy eating. Our professional business also had a strong quarter, driven by growth in the PRIME continuing medical education business. Connectivity also had a record fourth quarter, with revenues up 11%. Speedtest, Downdetector and RouteThis all experienced strong year-over-year growth in Q4, driven by new customers and increased service adoption by existing customers. Ekahau also produced solid year-over-year growth in Q4, with both enterprise and broadband service providers. Connectivity rolled out a major new product, Speedtest Pulse, in the fourth quarter.

Pulse is a handheld diagnostic device that empowers field technicians to instantly validate network installations and troubleshoot complex Wi-Fi issues on the first visit, driving operational efficiency and reducing costs. This launch follows the introduction of Speedtest Certified, an independent network verification program that awards a globally recognized badge of excellence to commercial venues, allowing them to monetize their superior connectivity performance as a marketing asset to attract high-value guests and tenants. Both products are expected to contribute to meaningful growth in 2026. Cybersecurity & MarTech revenues grew 2.7% in Q4. Growth was driven primarily by the cybersecurity vertical, with strong organic performance from consumer VPN and cloud backup.

Our momentum in cybersecurity reflects product enhancements, including the addition of threat protection and secure browsing to the IPVanish VPN, and the launch of VIPRE Integrated Email Security, which is powered by an AI engine that detects threats such as email compromise. Within the MarTech vertical, we see opportunities to help brands profitably acquire and engage customers. Our email business, with its focus on first-party data and email and SMS communication, and System1 Labs with its focus on efficient customer acquisition from paid traffic, are both working to deliver on this value proposition. As we disclosed in our last earnings call, we have engaged outside advisers to assist us in assessing how certain potential transactions can unlock greater shareholder value.

Our evaluation of potential strategic opportunities remains ongoing. As a result of that process, we have decided to defer issuing formal guidance at this time. But I do want to share some high-level thoughts about the outlook for our businesses in 2026. First and foremost, we are intently focused on delivering profitable growth and strong free cash flow generation in 2026, building on two consecutive years of great cash generation. While we expect Tech and Shopping revenues to continue the trend of double-digit revenue decline in 2026, we are forecasting improvements in the second half of the year via a combination of favorable year-over-year comps and benefits from increased platform engagement and growth in our licensing activities.

For the year, we are expecting Tech and Shopping to be down mid-single digits in revenue. While we work to turn Tech and Shopping around, we are confident in our ability to continue to generate growth in our four other segments. In Gaming & Entertainment, Health & Wellness, and Cybersecurity & MarTech, we expect revenue growth of low to mid-single digits for full-year 2026, and we anticipate continued double-digit revenue growth at Connectivity. Adjusted EBITDA margins for the company should continue to hover around 34%. I know there is great interest in updates regarding AI content licensing, and I wanted to share some observations.

We are actively engaged in discussions with key players, and the nature of these dialogues reinforces our confidence in the future revenue opportunities for content licensing.

Vivek R. Shah: However, we are taking a deliberate, principled approach to execution. The market is still defining the framework for appropriate compensation, specifically distinguishing between content used for model training versus content used for retrieval augmented generation, or RAG. Our position is consistent: both use cases require proper licensing. We will not enter into RAG-focused agreements that compromise our rights to fair compensation for foundational training. These are separate use cases with distinct value propositions, and our authoritative content must be valued accordingly in both contexts. We anticipate greater clarity on these fundamental licensing questions following the resolution of our ongoing litigation.

Once established, we believe this clarity will unlock licensing opportunities and allow us to move forward with agreements that appropriately reflect the full value of our content across all AI applications. With that, let me hand the call back to Bret.

Bret Richter: Thank you, Vivek. Let us discuss our financial results. Our earnings release reflects both our GAAP and adjusted financial results for Q4 and fiscal year 2025. My commentary will primarily relate to our Q4 2025 adjusted financial results and the comparison to prior periods. I will now turn to the financial results. Fourth quarter 2025 revenue was $406,700,000 as compared with revenue of $412,800,000 for the prior-year period, a decline of 1.5%. Fourth quarter 2025 adjusted EBITDA was $163,200,000 as compared with $171,800,000 for the prior-year period, reflecting a 5% decline. Our adjusted EBITDA margin for the quarter was 40.1%. We reported fourth quarter adjusted diluted EPS of $2.56. This figure reflects the impact of our active share repurchase program.

Turning to our fiscal year 2025 results, fiscal year 2025 total revenue increased 3.5% to $1,451,300,000 as compared with the prior year. Fiscal year 2025 adjusted EBITDA increased year over year to $495,100,000. Our adjusted EBITDA margin for fiscal year 2025 was 34.1%. Adjusted diluted EPS was $6.63, up slightly as compared with fiscal year 2024. During a number of our recent quarterly calls, we have discussed how our games publishing business has negatively impacted our recent financial results. This was true again in 2025, as games publishing contributed negative net revenue of $2,500,000.

However, during the fourth quarter, we took action and sold our games publishing business in a transaction that allowed us to recognize a book and cash tax savings associated with the loss related to the sale of the business, while maintaining the right to certain future payments tied to the performance of the assets under their new management. We did not attribute a value to these payments at closing and, as a result, we will recognize them as investment gains if and when we receive them in the future.

Our exit from games publishing achieved multiple benefits, including the elimination of the distractions associated with this non-core business line, which has also caused significant volatility in the quarterly results of our Tech and Shopping segment. Please note that this exit has no impact on the Humble Bundle storefront in our Gaming & Entertainment segment. Now I will review our revenue mix. Q4 2025 advertising and performance marketing revenue declined 4.4% as compared with the prior-year period, while fiscal year 2025 advertising and performance marketing revenue increased 5.9% as compared with 2024. Q4 2025 subscription and licensing revenue increased 4% as compared with the prior-year period, and fiscal year 2025 subscription and licensing revenues increased 2.2% year over year.

Q4 2025 other revenues declined by $600,000 year over year. In fiscal year 2025, other revenues declined by $9,200,000. These changes both primarily reflect the impact of the games publishing business. Turning to our segments, three of our five segments grew full-year revenues in 2025, and four of our five segments grew revenues in the fourth quarter. The now-exited games publishing business reduced Tech and Shopping segment revenues by $2,500,000 in the fourth quarter and by $4,900,000 in full year 2025. However, the 2025 year-over-year revenue decline associated with the game publishing business was approximately $14,000,000, reflecting an approximately 1% drag on consolidated revenue growth. This revenue decline also had a high negative flow-through impact to adjusted EBITDA.

Please refer to our balance sheet. As of year-end 2025, we had $607,000,000 of cash and cash equivalents, and $93,000,000 of long-term investments. We also have significant leverage capacity on both a gross and net leverage basis. At year-end, gross leverage was 1.8 times trailing twelve months adjusted EBITDA, and our net leverage was 0.5 times, and 0.3 times including the value of our financial investments. During the fourth quarter, we bought back 1,750,000 shares for $60,600,000. In fiscal year 2025, we deployed nearly $174,000,000 to repurchase approximately 4,800,000 shares, and during the course of 2025, we reduced the number of shares outstanding by more than 10%.

Since 01/01/2026, we repurchased approximately 740,000 additional shares, and we believe that at the current valuation level of Ziff Davis, Inc.’s stock, share repurchases continue to offer an attractive use of our investable capital. Our recent share repurchase activity nearly exhausts our existing stock repurchase authorization. However, this week, our board of directors increased our stock repurchase authorization by 10,000,000 shares, bringing the total amount currently available for repurchase to 10,700,000 shares. This authorization is valid until February 2036. Please note that given our current active review of potential value-creating opportunities, there may be periods of time when we are not able to repurchase shares under this authorization.

During 2025, we closed a total of seven acquisitions across our businesses, investing a total of $68,700,000 net of cash received to support our M&A program. We anticipate we will continue to be an active and disciplined acquirer in 2026 as opportunities arise to add capabilities to our businesses in an accretive manner. Looking ahead to the balance of 2026, we are intently focused on delivering profitable growth, robust adjusted EBITDA margins, and strong free cash flow generation. As Vivek discussed, due to our current review process, we are not providing formal full-year 2026 guidance at the present time. However, I would like to offer some insight related to our expectations for 2026.

We expect first quarter 2026 consolidated year-over-year revenue growth to be relatively flat or slightly negative, as the continued headwinds in the affiliate commerce revenues in our Tech and Shopping division that Vivek noted earlier are expected to largely offset the growth in the balance of our businesses. Given seasonality, our Q1 adjusted EBITDA margins are typically lower than our fiscal year margins, and Q1 2026 margins are expected to be about three points lower year over year, primarily reflecting an anticipated year-over-year decline in Tech and Shopping revenue, a lower-margin revenue mix at Health & Wellness, and the continued investment in growth at Connectivity.

Q1 adjusted diluted EPS will benefit from a year-over-year drop in our shares outstanding due to our active buyback program. Our supplemental materials include reconciliation statements for our non-GAAP measures to their nearest GAAP equivalents. Please see slide 25, which includes a reconciliation of free cash flow to net cash provided by operating activities. Our businesses continue to produce robust free cash flow. 2025 free cash flow was $287,900,000, up $4,200,000 as compared with 2024. Q4 2025 free cash flow of $157,800,000 was up significantly from $131,100,000 in Q4 2024. And fiscal year 2025 free cash flow reflects 58.1% of our 2025 fiscal year adjusted EBITDA of $495,100,000.

Stepping back a bit, Ziff Davis, Inc. has made considerable financial progress over the last few years, despite a challenging operating environment. Since the end of 2022, the first full year after the Consensus spinoff, we have grown free cash flow by 25%, reduced our gross debt levels by nearly 14%, and lowered our year-end shares outstanding by more than 18%. During this time, we also deployed more than $300,000,000 for 13 acquisitions, adding capabilities across all of our operating segments. And as Vivek noted earlier, we are actively working to pursue opportunities that we believe offer strong prospects to realize additional shareholder value.

Although there is no assurance on any future transactions, we continue to believe that our current trading levels do not fully appreciate the intrinsic value of our businesses. We will seek to provide timely updates as appropriate. I will now ask the operator to rejoin us to host our Q&A.

Operator: Thank you. We will now be conducting a question and answer session. In the interest of time, we ask that you please limit yourself to one question. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press 2 if you wish to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we begin.

Vivek R. Shah: Thank you.

Operator: And your first question this morning is coming from Rishi Jaluria from RBC. Rishi, your line is live. Please go ahead.

Rishi Jaluria: Wonderful. Thanks so much for taking my questions. Maybe just one for me to keep it, but Vivek, I wanted to expand a little bit on some of the AI search tailwinds that you talked about on Tech and Shopping. Maybe can you expand a little bit in terms of how that has progressed? This is obviously a trend we have been discussing for a while. Some of the investments that you can make to maybe capitalize on the AI search opportunity and take that kind of segment back to a better growth trajectory.

And then if we think about AI search throughout the rest of your businesses, are there other parts that have proven to maybe be a little bit more resilient, whether it is healthcare or gaming or whatever. Maybe any color you could give as a potential, that would be. Thank you.

Vivek R. Shah: Thanks, Rishi, for the question. So, yeah, look. What I would say is, generally speaking, a lot of traffic is fungible, meaning that lost search traffic can be and has been made up with other sources of engagement, apps, social traffic, video, programmatic and email. So the degree to which in any of our segments, in the Gaming & Entertainment and Health & Wellness segments in particular, we are able to offset search traffic declines. Where that has become really hard is within Tech and Shopping because the one type of traffic that really is hard to replace is high-intent consumers who arrive via search looking for a product or a service and then clicking through to make a purchase.

That is the affiliate commerce and affiliate commission business. And so that particular traffic is harder to replace, though I will talk about things that we are doing to offset. But that is harder to replace, and that is very much concentrated in our Tech and Shopping segment. In fact, just to dimensionalize it a little bit, so we did in 2025 roughly $90,000,000 in affiliate commerce commissions related to organic traffic. That was down about $25,000,000 year over year. So it gives you a sense of kind of, and half of that $25,000,000 was in Q4, the impact and what is going on within Tech and Shopping.

From an offset point of view, and as I said, look, I think this is something that will start to materialize in the second half of this year, app traffic, browser extension traffic, and then other forms of monetization out of affiliate commerce around video, licensing, events, and broader display. So a variety of things that mix, but the high level is where we are seeing search challenges show up, we are really seeing it within this Tech and Shopping segment.

Operator: Thank you. Your next question is coming from Ross Sandler from Barclays. Ross, your line is live. Please go ahead.

Ross Sandler: Yeah. That was really helpful on that $90,000,000. So that is about 25% of that segment’s revenue in 2025. Can you talk maybe about the percent of traffic, and when we see, it sounds like from your guidance, the kind of unwind of SEO traffic is peaking right now. And by 2026, it should be less of a headwind. Is that the right way to think about it? Then the second question is just on the 300 bps of margin contraction in the first quarter.

I guess, just how do we think about, in light of the declining kind of high-margin SEO-related traffic, how do we think about your ability to kind of contain the cost structure and these margins kind of moving forward? Thanks a lot, guys.

Vivek R. Shah: Yeah. Thanks, Ross. I will answer your first one and then ask Bret to share some comments on the second one. But, you know, so just taking a step back, Tech and Shopping obviously is the challenge, was the challenge in Q4, will continue to be the challenge in 2026. I do not want to lose sight of the fact that the other four segments grew nicely in 2025, and we believe will continue to grow in 2026. Within Tech and Shopping, the affiliate commerce piece is one of what I would refer to as three challenges within the business, and worth describing and talking about the other two for a moment.

So remember, we have the B2B business that is inside of the Tech and Shopping segment. You will recall that our strategy in 2025 was to intentionally contract revenue at a rate that would be less than the contraction of expenses. In other words, we would cut more expenses than revenues, and we did that. So in 2025, the B2B revenues were down $11,000,000 year over year, but the EBITDA was up close to $6,000,000 and positive. So that strategy of shrinking the footprint of that business, cutting out certain products and service lines, has worked but shows up as a revenue drag. I just want to point that piece out.

The last one is the games publishing business that is still a residual business that stayed within Tech and Shopping, which Bret pointed out, we sold. We are out of, you know, that was like a $14–$15, $14,000,000 year-over-year bad guy in 2025 as well. So those are just two things to just point out as we think about 2026 versus 2025 that as we lap these things are going to be beneficial.

But then, yes, look, I think the belief that the pain that we are seeing on the affiliate commerce side in Tech and Shopping will start to improve in the second half, both because of comps as well as other initiatives, again, video monetization, licensing, building out traffic in both the RetailMeNot app and browser extension. And that collection brings the, you know, overall challenge of Tech and Shopping to being sort of more of a, from a full-year point of view, kind of a low single-digit decliner but still a decliner.

Bret Richter: And, Ross, I think on margins, I think what I would say is almost widening the lens for a moment. If you look back over the last several years, despite various puts and takes in the business, we have been able to largely maintain margin. It has been a deliberate effort across the company, looking at the way we do business as business dynamics change.

I think, as Vivek pointed out, within Tech and Shopping, we have recently shown, one, our ability to do that in B2B, which has been a consistent source of revenue pressure for the last several years, and taking action to look at how we run the business and maintain margin and produce margin, taking some actions on some drags like Humble Games. And then, you know, in the first quarter, I think what we are largely looking at is just the flow-through impact of some of that revenue softness, coupled with a little bit of, you know, mix change in some of the other businesses.

And then as we look at the company overall for fiscal year 2026, as Vivek noted, in our view, it is kind of a little bit of a first-half, second-half story. And overall, you know, if we progress as sort of anticipated, we think we will be in the range of delivering upon what we said.

Operator: Thank you. And your next question, or as a reminder, if you wish to join the queue to ask a question at this time, please press. And your next question is coming from Shyam Patil from Susquehanna. Shyam, your line is live. Please go ahead.

Shyam Vasant Patil: Hey, guys. Thanks for all the color on the segments. I had one on Tech and Shopping and one on M&A. Just on Tech and Shopping, Vivek, I know you guys talked about there being a lot of moving parts in that business for this year. But how do you think about kind of what is the right growth rate or growth range for that business going forward? Not just in 2026, but just from a high-level perspective, what kind of growth rate do you think that business should have, margin profile as well? And then on M&A, where do you see opportunities this year for M&A? Just kind of curious which segments, which pockets. Thank you.

Vivek R. Shah: Yeah. No. Great question, Shyam. So I will start on the long-term outlook on Tech and Shopping, and I do not believe it should be very different than our other digital media segments, principally Gaming & Entertainment and Health & Wellness. And so I think it should be a mid-single-digit grower. But, again, I think we have to get through this phase where the search challenges within the affiliate commerce business that, by the way, was a business we created from scratch when we first bought the assets that make up a lot of this segment.

And so, look, we were very successful in creating a new form of monetization when we initially acquired a lot of the assets in this category, and I think we are very confident that we will find new forms of monetization within these brands. And, by the way, when we talk about Tech and Shopping, we are talking about market-leading brands. CNET Group and RetailMeNot Group are leaders in their respective categories of technology and shopping. With respect to M&A, look, we believe that the market fear in digital media actually presents us with a pretty unique opportunity to be an active buyer in this space. Look, the valuations are compelling.

You see our own, and we are an at-scale diversified entity. You can imagine what businesses that do not have our scale of diversification ultimately trade for. And I think the fear is overly pronounced. And while there are headwinds, and we are experiencing those within our business, we have shown a fair amount of resilience in the face of these pressures and believe we have a pretty good track record in business transformation and managing these really high-quality brands. And that is the key: our focus from an M&A point of view are really high-quality brands in high-value categories. So, look, we have the cash. We certainly have the free cash flow generation.

And so we are going to continue to look for attractive opportunities. And so I think both things can be true, by the way, that we can be very focused on opportunities within the M&A landscape while we continue in the strategic review process to unlock value for shareholders.

Operator: Thank you. Your next question is coming from Danny Pfeiffer from JPMorgan. Danny, your line is live. Please go ahead.

Danny Pfeiffer: Hey, thanks for the questions. For the first, as you have discussions with outside advisers in the sales businesses, can you provide any color on what divisions prospective buyers have been looking at the most? And then for the second, putting the AI headwinds aside, can you provide us with an update on the broader trends you are seeing in the ad market today?

Vivek R. Shah: Yeah. So listen, you know, look, we wish we could share more, but as we said in our prepared remarks, an active process. We promise, and we are going to provide updates as and when we are able to. But right now, that is all I can really say at this point. On your question about the ad market, and I often say, look, for us at least, the ad market is not one market, it is three. And I would say that if you unpack each of those, so we take Gaming & Entertainment, last year, roughly 5% ad revenue growth. I think that will be consistent going into 2026.

Health & Wellness had a very strong double-digit advertising growth rate in 2025. I think that will moderate a bit, be more sort of mid-single-digit range. Remember, in 2025 for us, within the Health & Wellness business, we had some acquisitions that accelerated some of that revenue growth. So the organic, I think, is mid single digits. So I think both Gaming & Entertainment and Health & Wellness, which is largely pharma, is good, and I think we are happy with where we are there. It is the Tech and Shopping experience, which, again, I would bifurcate kind of the affiliate commerce from the non-affiliate commerce. I think the non-affiliate commerce we feel pretty good about.

It is the, and the non-B2B, I should point out, but it is the affiliate commerce piece that we are going to have to work through a couple of quarters of challenges before we get to kind of the other side of that. Thanks.

Danny Pfeiffer: Thank you.

Operator: And once again, as a reminder, if you wish to join the queue to ask a question at this time, please press 1 on your telephone keypad. Once again, that will be 1 on your keypad at this time if you wish to join the queue. Your next question is coming from Robert Coolbrith from Evercore ISI. Robert, your line is live. Please go ahead.

Robert James Coolbrith: Hey, good morning, and thanks for the opportunity to ask a question. Can you speak more directly to both the traffic and the value at risk in Health & Wellness from, you know, search in general, as well as, you know, some concerns, I think, in the market around AI-based competition on the clinician side? You can maybe talk a little bit about that as well.

And then finally, just to go back to M&A, as both a buyer and seller, just given the level of AI-related uncertainty, as well as the embedded call option on AI licensing, do you see that sort of freezing up the market, or are you and potential counterparties able to sort of see through that, work through that? Thank you.

Vivek R. Shah: Great questions, Rob. So with respect to the search dynamics within Health & Wellness, that is not an area that I am really concerned. Much of the inventory within that segment is not search-based. So we have our partnership, our hospital ad network, Mayo Clinic and Cleveland Clinic, and hopefully soon adding some more to that network. We do these custom condition centers, which really do not rely on search engine traffic. We have our direct-to-provider business, which is largely email and other forms of physician engagement. So with respect to Health & Wellness, I am not concerned about whatever the search dynamics are.

And so what I would say is that it is more of a pharma commercialization business where we work with pharma to commercialize their drugs and to drive patient adherence, as well as helping influence doctors’ understandings of the prescription opportunities that are available to them. You know, I think with respect to your question, AI and M&A, look. I think that deals can be done, and I understand your point, which is some folks may be holding out just given that there could be a potential windfall on the AI licensing front and so may not be willing to transact right now. And I think it is a balance.

That is certainly a question that is out there, that until we really understand what the revenue framework and potential is around licensed content for LLMs, you may have certain owners of content assets skittish about transacting. That is certainly out there. On the other hand, I think there are folks who just sit there and say, look, it is a difficult market, might be time for them to concede or capitulate, or they find it difficult to sort of bridge where they are to where they want to go, and that will be an opportunity for us. Look. I think it depends. I do not think there is one answer.

That has certainly come up, because people view it as, quote, unquote, a free option on AI licensing revenues in the future. But, you know, we will see. And, look, I think more broadly, I do think that there are not as many buyers positioned the way we are positioned in terms of balance sheet capabilities, skill set, platform, and frankly, interest in these assets.

Robert James Coolbrith: Got it. And just if we could go back to the growing AI footprint, or the footprint of AI tools on the clinician side, are you seeing any impact there or no real impact?

Vivek R. Shah: You know, it is a good question. I mean, I certainly believe that physicians, like pretty much everyone else, are using these AI tools in their day to day. And, look, I think that obviously is something that will present, I imagine, marketing opportunities, etcetera. And so, look, yeah, I think that any and all tools that attract physician attention are valuable tools. And so we think we have valuable news, information, continuing medical education. You know, the advantage to continuing medical education is providers need to get their CME credits. So we feel pretty good about a physician engagement platform that is tied to the need to get CME credits.

Robert James Coolbrith: Very helpful. Thank you.

Operator: And there are no further questions in queue at this time. I would now like to hand the call back to Bret Richter for any closing remarks.

Bret Richter: Thanks, Tom, and thanks everyone, for joining us today. We appreciate your ongoing investment and time, and we look forward to speaking with you in the next couple of months and in our upcoming Q1 earnings call. Thank you.

Operator: This does conclude today’s conference call. You can disconnect your phone lines at this time, and have a wonderful day. Thank you once again for your participation.

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