000108404812/312023Q2falsehttp://fasb.org/us-gaap/2023#AccountingStandardsUpdate202006Member62P1Y0.0093783P4YP4Y00010840482023-01-012023-06-3000010840482023-07-31xbrli:shares00010840482023-06-30iso4217:USD00010840482022-12-31iso4217:USDxbrli:shares0001084048us-gaap:SeriesAPreferredStockMember2022-12-310001084048us-gaap:SeriesAPreferredStockMember2023-06-300001084048us-gaap:SeriesBPreferredStockMember2022-12-310001084048us-gaap:SeriesBPreferredStockMember2023-06-3000010840482023-04-012023-06-3000010840482022-04-012022-06-3000010840482022-01-012022-06-300001084048us-gaap:RelatedPartyMember2023-01-012023-06-300001084048us-gaap:RelatedPartyMember2022-01-012022-06-3000010840482021-12-3100010840482022-06-300001084048us-gaap:CommonStockMember2023-03-310001084048us-gaap:AdditionalPaidInCapitalMember2023-03-310001084048us-gaap:TreasuryStockCommonMember2023-03-310001084048us-gaap:RetainedEarningsMember2023-03-310001084048us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-3100010840482023-03-310001084048us-gaap:RetainedEarningsMember2023-04-012023-06-300001084048us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300001084048us-gaap:CommonStockMember2023-04-012023-06-300001084048us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001084048us-gaap:TreasuryStockCommonMember2023-04-012023-06-300001084048us-gaap:CommonStockMember2023-06-300001084048us-gaap:AdditionalPaidInCapitalMember2023-06-300001084048us-gaap:TreasuryStockCommonMember2023-06-300001084048us-gaap:RetainedEarningsMember2023-06-300001084048us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001084048us-gaap:CommonStockMember2022-03-310001084048us-gaap:AdditionalPaidInCapitalMember2022-03-310001084048us-gaap:TreasuryStockCommonMember2022-03-310001084048us-gaap:RetainedEarningsMember2022-03-310001084048us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-3100010840482022-03-310001084048us-gaap:RetainedEarningsMember2022-04-012022-06-300001084048us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300001084048us-gaap:CommonStockMember2022-04-012022-06-300001084048us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001084048us-gaap:TreasuryStockCommonMember2022-04-012022-06-300001084048us-gaap:CommonStockMember2022-06-300001084048us-gaap:AdditionalPaidInCapitalMember2022-06-300001084048us-gaap:TreasuryStockCommonMember2022-06-300001084048us-gaap:RetainedEarningsMember2022-06-300001084048us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001084048us-gaap:CommonStockMember2022-12-310001084048us-gaap:AdditionalPaidInCapitalMember2022-12-310001084048us-gaap:TreasuryStockCommonMember2022-12-310001084048us-gaap:RetainedEarningsMember2022-12-310001084048us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001084048us-gaap:RetainedEarningsMember2023-01-012023-06-300001084048us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-06-300001084048us-gaap:CommonStockMember2023-01-012023-06-300001084048us-gaap:AdditionalPaidInCapitalMember2023-01-012023-06-300001084048us-gaap:TreasuryStockCommonMember2023-01-012023-06-300001084048us-gaap:CommonStockMember2021-12-310001084048us-gaap:AdditionalPaidInCapitalMember2021-12-310001084048us-gaap:TreasuryStockCommonMember2021-12-310001084048us-gaap:RetainedEarningsMember2021-12-310001084048us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001084048us-gaap:ConvertibleDebtMemberzd:A175ConvertibleNotesMember2019-11-15xbrli:pure00010840482021-01-012021-12-310001084048us-gaap:AdditionalPaidInCapitalMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2021-12-310001084048us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2021-12-310001084048srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2021-12-310001084048us-gaap:RetainedEarningsMember2022-01-012022-06-300001084048us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-06-300001084048us-gaap:CommonStockMember2022-01-012022-06-300001084048us-gaap:AdditionalPaidInCapitalMember2022-01-012022-06-300001084048us-gaap:TreasuryStockCommonMember2022-01-012022-06-300001084048zd:DigitalMediaSegmentMemberus-gaap:AdvertisingMemberus-gaap:OperatingSegmentsMember2023-04-012023-06-300001084048zd:DigitalMediaSegmentMemberus-gaap:AdvertisingMemberus-gaap:OperatingSegmentsMember2022-04-012022-06-300001084048zd:DigitalMediaSegmentMemberus-gaap:AdvertisingMemberus-gaap:OperatingSegmentsMember2023-01-012023-06-300001084048zd:DigitalMediaSegmentMemberus-gaap:AdvertisingMemberus-gaap:OperatingSegmentsMember2022-01-012022-06-300001084048zd:DigitalMediaSegmentMemberzd:SubscriptionMemberus-gaap:OperatingSegmentsMember2023-04-012023-06-300001084048zd:DigitalMediaSegmentMemberzd:SubscriptionMemberus-gaap:OperatingSegmentsMember2022-04-012022-06-300001084048zd:DigitalMediaSegmentMemberzd:SubscriptionMemberus-gaap:OperatingSegmentsMember2023-01-012023-06-300001084048zd:DigitalMediaSegmentMemberzd:SubscriptionMemberus-gaap:OperatingSegmentsMember2022-01-012022-06-300001084048zd:DigitalMediaSegmentMemberzd:OtherMemberus-gaap:OperatingSegmentsMember2023-04-012023-06-300001084048zd:DigitalMediaSegmentMemberzd:OtherMemberus-gaap:OperatingSegmentsMember2022-04-012022-06-300001084048zd:DigitalMediaSegmentMemberzd:OtherMemberus-gaap:OperatingSegmentsMember2023-01-012023-06-300001084048zd:DigitalMediaSegmentMemberzd:OtherMemberus-gaap:OperatingSegmentsMember2022-01-012022-06-300001084048zd:DigitalMediaSegmentMemberus-gaap:OperatingSegmentsMember2023-04-012023-06-300001084048zd:DigitalMediaSegmentMemberus-gaap:OperatingSegmentsMember2022-04-012022-06-300001084048zd:DigitalMediaSegmentMemberus-gaap:OperatingSegmentsMember2023-01-012023-06-300001084048zd:DigitalMediaSegmentMemberus-gaap:OperatingSegmentsMember2022-01-012022-06-300001084048zd:SubscriptionMemberus-gaap:OperatingSegmentsMemberzd:CybersecurityAndMartechSegmentMember2023-04-012023-06-300001084048zd:SubscriptionMemberus-gaap:OperatingSegmentsMemberzd:CybersecurityAndMartechSegmentMember2022-04-012022-06-300001084048zd:SubscriptionMemberus-gaap:OperatingSegmentsMemberzd:CybersecurityAndMartechSegmentMember2023-01-012023-06-300001084048zd:SubscriptionMemberus-gaap:OperatingSegmentsMemberzd:CybersecurityAndMartechSegmentMember2022-01-012022-06-300001084048us-gaap:OperatingSegmentsMemberzd:CybersecurityAndMartechSegmentMember2023-04-012023-06-300001084048us-gaap:OperatingSegmentsMemberzd:CybersecurityAndMartechSegmentMember2022-04-012022-06-300001084048us-gaap:OperatingSegmentsMemberzd:CybersecurityAndMartechSegmentMember2023-01-012023-06-300001084048us-gaap:OperatingSegmentsMemberzd:CybersecurityAndMartechSegmentMember2022-01-012022-06-300001084048us-gaap:IntersegmentEliminationMember2023-04-012023-06-300001084048us-gaap:IntersegmentEliminationMember2022-04-012022-06-300001084048us-gaap:IntersegmentEliminationMember2023-01-012023-06-300001084048us-gaap:IntersegmentEliminationMember2022-01-012022-06-300001084048us-gaap:TransferredAtPointInTimeMember2023-04-012023-06-300001084048us-gaap:TransferredAtPointInTimeMember2022-04-012022-06-300001084048us-gaap:TransferredAtPointInTimeMember2023-01-012023-06-300001084048us-gaap:TransferredAtPointInTimeMember2022-01-012022-06-300001084048us-gaap:TransferredOverTimeMember2023-04-012023-06-300001084048us-gaap:TransferredOverTimeMember2022-04-012022-06-300001084048us-gaap:TransferredOverTimeMember2023-01-012023-06-300001084048us-gaap:TransferredOverTimeMember2022-01-012022-06-3000010840482023-07-012023-06-3000010840482025-01-012023-06-3000010840482026-01-012023-06-300001084048us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2023-01-012023-06-30zd:subsidiary0001084048zd:Fiscal2023AcquisitionsMember2023-06-300001084048zd:Fiscal2023AcquisitionsMember2023-01-012023-06-300001084048zd:LifecycleMarketingGroupLimitedMember2022-01-210001084048zd:FitNowIncMember2022-06-020001084048us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2022-01-012022-06-300001084048zd:Fiscal2022AcquisitionsMember2022-01-012022-06-300001084048zd:Fiscal2022AcquisitionsMember2022-06-300001084048us-gaap:TradeNamesMemberzd:Fiscal2022AcquisitionsMember2022-06-300001084048us-gaap:CustomerRelationshipsMemberzd:Fiscal2022AcquisitionsMember2022-06-300001084048us-gaap:OtherIntangibleAssetsMemberzd:Fiscal2022AcquisitionsMember2022-06-300001084048zd:Fiscal2022AcquisitionsMember2022-04-012022-06-300001084048us-gaap:RelatedPartyMember2022-12-310001084048us-gaap:CorporateDebtSecuritiesMember2022-04-120001084048us-gaap:CorporateDebtSecuritiesMember2023-05-190001084048us-gaap:CorporateDebtSecuritiesMember2023-06-300001084048us-gaap:CorporateDebtSecuritiesMember2022-12-31zd:investment00010840482022-01-012022-12-310001084048zd:OCVManagementLLCMemberus-gaap:RelatedPartyMember2023-01-012023-06-300001084048zd:OCVManagementLLCMemberus-gaap:RelatedPartyMember2022-01-012022-06-300001084048zd:OCVManagementLLCMember2023-06-300001084048zd:OCVManagementLLCMember2022-12-310001084048srt:MinimumMemberus-gaap:MeasurementInputDiscountRateMember2023-06-300001084048srt:MinimumMemberus-gaap:MeasurementInputDiscountRateMember2022-12-310001084048srt:MaximumMemberus-gaap:MeasurementInputDiscountRateMember2023-06-300001084048srt:MaximumMemberus-gaap:MeasurementInputDiscountRateMember2022-12-310001084048srt:MinimumMemberzd:MeasurementInputConversionTermMember2023-06-300001084048srt:MaximumMemberzd:MeasurementInputConversionTermMember2023-06-300001084048zd:MeasurementInputConversionTermMember2022-12-310001084048us-gaap:SeniorNotesMemberzd:A4625SeniorNotesDueIn2030Member2020-10-070001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2023-06-300001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Member2023-06-300001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMember2023-06-300001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:MoneyMarketFundsMember2023-06-300001084048us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:MoneyMarketFundsMember2023-06-300001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel1Member2023-06-300001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2023-06-300001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel3Member2023-06-300001084048us-gaap:EstimateOfFairValueFairValueDisclosureMember2023-06-300001084048us-gaap:CarryingReportedAmountFairValueDisclosureMember2023-06-300001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel1Memberzd:A4625SeniorNotesDueIn2030Member2023-06-300001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Memberzd:A4625SeniorNotesDueIn2030Member2023-06-300001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel3Memberzd:A4625SeniorNotesDueIn2030Member2023-06-300001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberzd:A4625SeniorNotesDueIn2030Member2023-06-300001084048us-gaap:CarryingReportedAmountFairValueDisclosureMemberzd:A4625SeniorNotesDueIn2030Member2023-06-300001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberzd:A175ConvertibleNotesMemberus-gaap:FairValueInputsLevel1Member2023-06-300001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberzd:A175ConvertibleNotesMemberus-gaap:FairValueInputsLevel2Member2023-06-300001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel3Memberzd:A175ConvertibleNotesMember2023-06-300001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberzd:A175ConvertibleNotesMember2023-06-300001084048zd:A175ConvertibleNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2023-06-300001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2022-12-310001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel2Member2022-12-310001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMember2022-12-310001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:MoneyMarketFundsMember2022-12-310001084048us-gaap:CarryingReportedAmountFairValueDisclosureMemberus-gaap:MoneyMarketFundsMember2022-12-310001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel1Member2022-12-310001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Member2022-12-310001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel3Member2022-12-310001084048us-gaap:EstimateOfFairValueFairValueDisclosureMember2022-12-310001084048us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-12-310001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel1Memberzd:A4625SeniorNotesDueIn2030Member2022-12-310001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel2Memberzd:A4625SeniorNotesDueIn2030Member2022-12-310001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel3Memberzd:A4625SeniorNotesDueIn2030Member2022-12-310001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberzd:A4625SeniorNotesDueIn2030Member2022-12-310001084048us-gaap:CarryingReportedAmountFairValueDisclosureMemberzd:A4625SeniorNotesDueIn2030Member2022-12-310001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberzd:A175ConvertibleNotesMemberus-gaap:FairValueInputsLevel1Member2022-12-310001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberzd:A175ConvertibleNotesMemberus-gaap:FairValueInputsLevel2Member2022-12-310001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel3Memberzd:A175ConvertibleNotesMember2022-12-310001084048us-gaap:EstimateOfFairValueFairValueDisclosureMemberzd:A175ConvertibleNotesMember2022-12-310001084048zd:A175ConvertibleNotesMemberus-gaap:CarryingReportedAmountFairValueDisclosureMember2022-12-310001084048zd:ContingentConsiderationArrangementsMember2022-12-310001084048zd:ContingentConsiderationArrangementsMember2021-12-310001084048us-gaap:CorporateDebtSecuritiesMember2021-12-310001084048zd:ContingentConsiderationArrangementsMember2023-01-012023-06-300001084048us-gaap:CorporateDebtSecuritiesMember2023-01-012023-06-300001084048zd:ContingentConsiderationArrangementsMember2022-01-012022-06-300001084048us-gaap:CorporateDebtSecuritiesMember2022-01-012022-06-300001084048zd:ContingentConsiderationArrangementsMember2023-06-300001084048zd:ContingentConsiderationArrangementsMember2022-06-300001084048us-gaap:CorporateDebtSecuritiesMember2022-06-300001084048zd:DigitalMediaSegmentMemberus-gaap:OperatingSegmentsMember2022-12-310001084048us-gaap:OperatingSegmentsMemberzd:CybersecurityAndMartechSegmentMember2022-12-310001084048zd:DigitalMediaSegmentMemberus-gaap:OperatingSegmentsMember2023-06-300001084048us-gaap:OperatingSegmentsMemberzd:CybersecurityAndMartechSegmentMember2023-06-300001084048zd:DigitalMediaSegmentMember2023-01-012023-06-300001084048zd:DigitalMediaSegmentMember2022-01-012022-12-310001084048us-gaap:TradeNamesMember2023-06-300001084048us-gaap:CustomerRelationshipsMember2023-06-300001084048us-gaap:OtherIntangibleAssetsMember2023-06-300001084048us-gaap:CustomerRelationshipsMembersrt:MinimumMember2023-06-300001084048srt:MaximumMemberus-gaap:CustomerRelationshipsMember2023-06-300001084048us-gaap:TradeNamesMember2022-12-310001084048us-gaap:CustomerRelationshipsMember2022-12-310001084048us-gaap:OtherIntangibleAssetsMember2022-12-310001084048us-gaap:CustomerRelationshipsMembersrt:MinimumMember2022-12-310001084048srt:MaximumMemberus-gaap:CustomerRelationshipsMember2022-12-310001084048us-gaap:SeniorNotesMemberzd:A4625SeniorNotesDueIn2030Member2023-06-300001084048us-gaap:SeniorNotesMemberzd:A4625SeniorNotesDueIn2030Member2022-12-310001084048us-gaap:ConvertibleDebtMemberzd:A175ConvertibleNotesMember2023-06-300001084048us-gaap:ConvertibleDebtMemberzd:A175ConvertibleNotesMember2022-12-310001084048us-gaap:ConvertibleDebtMember2023-06-300001084048us-gaap:ConvertibleDebtMember2022-12-310001084048us-gaap:RevolvingCreditFacilityMember2023-06-300001084048us-gaap:RevolvingCreditFacilityMember2022-12-310001084048us-gaap:SeniorNotesMemberzd:A4625SeniorNotesDueIn2030Member2020-10-072020-10-070001084048us-gaap:SeniorNotesMemberzd:A60SeniorNotesMember2020-10-070001084048us-gaap:SeniorNotesMemberus-gaap:DebtInstrumentRedemptionPeriodOneMemberzd:A4625SeniorNotesDueIn2030Member2020-10-072020-10-070001084048us-gaap:DebtInstrumentRedemptionPeriodTwoMemberus-gaap:SeniorNotesMemberzd:A4625SeniorNotesDueIn2030Member2020-10-072020-10-07zd:fiscalQuarterPeriod0001084048us-gaap:SeniorNotesMemberzd:A4625SeniorNotesDueIn2030Member2022-04-012022-06-300001084048us-gaap:SeniorNotesMemberzd:A4625SeniorNotesDueIn2030Member2022-01-012022-06-300001084048us-gaap:SeniorNotesMemberzd:A4625SeniorNotesDueIn2030Member2023-01-012023-06-300001084048us-gaap:ConvertibleDebtMemberzd:A175ConvertibleNotesMember2019-11-152019-11-150001084048us-gaap:ConvertibleDebtMemberzd:A175ConvertibleNotesMember2021-05-010001084048us-gaap:ConvertibleDebtMemberzd:A175ConvertibleNotesMember2023-01-012023-06-300001084048us-gaap:ConvertibleDebtMemberzd:A175ConvertibleNotesMember2023-04-012023-06-300001084048zd:A175ConvertibleNotesMemberus-gaap:ConvertibleDebtMembersrt:ScenarioForecastMember2023-08-012023-08-010001084048zd:A175ConvertibleNotesMemberus-gaap:ConvertibleDebtMembersrt:ScenarioForecastMember2023-07-012023-09-300001084048zd:A175ConvertibleNotesMemberus-gaap:ConvertibleDebtMembersrt:ScenarioForecastMember2023-11-012023-11-010001084048zd:A175ConvertibleNotesMemberus-gaap:ConvertibleDebtMembersrt:ScenarioForecastMember2023-08-012023-11-010001084048zd:A175ConvertibleNotesMemberus-gaap:ConvertibleDebtMemberus-gaap:DebtInstrumentRedemptionPeriodOneMember2019-11-152019-11-15zd:tradingDay0001084048us-gaap:DebtInstrumentRedemptionPeriodTwoMemberzd:A175ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2019-11-152019-11-150001084048us-gaap:ConvertibleDebtMemberzd:A175ConvertibleNotesMember2022-04-012022-06-300001084048us-gaap:ConvertibleDebtMemberzd:A175ConvertibleNotesMember2022-01-012022-06-300001084048zd:A175ConvertibleNotesMemberus-gaap:ConvertibleDebtMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2022-01-010001084048us-gaap:ConvertibleDebtMemberzd:A175ConvertibleNotesMember2022-01-010001084048us-gaap:RevolvingCreditFacilityMember2021-04-070001084048zd:BridgeLoanFacilityMemberus-gaap:BridgeLoanMemberus-gaap:FederalFundsEffectiveSwapRateMember2021-04-072021-04-070001084048zd:LIBORRateMemberzd:BridgeLoanFacilityMemberus-gaap:BridgeLoanMember2021-04-070001084048srt:MinimumMemberus-gaap:BaseRateMemberzd:BridgeLoanFacilityMember2021-04-072021-04-070001084048srt:MaximumMemberus-gaap:BaseRateMemberzd:BridgeLoanFacilityMember2021-04-072021-04-070001084048srt:MinimumMemberzd:LIBORRateMemberzd:BridgeLoanFacilityMember2021-04-072021-04-070001084048srt:MaximumMemberzd:LIBORRateMemberzd:BridgeLoanFacilityMember2021-04-072021-04-070001084048zd:CreditAgreementMemberus-gaap:LineOfCreditMember2023-06-300001084048zd:CreditAgreementMemberus-gaap:LineOfCreditMember2023-01-012023-06-300001084048us-gaap:SecuredDebtMemberzd:CreditAgreementMemberus-gaap:LineOfCreditMember2022-06-100001084048us-gaap:SecuredDebtMemberzd:CreditAgreementMemberus-gaap:LineOfCreditMember2022-06-102022-06-100001084048us-gaap:SecuredDebtMemberzd:CreditAgreementMemberus-gaap:LineOfCreditMemberus-gaap:FederalFundsEffectiveSwapRateMember2022-06-100001084048us-gaap:SecuredDebtMemberzd:CreditAgreementMemberus-gaap:LineOfCreditMemberzd:LIBORRateMember2022-06-100001084048us-gaap:SecuredDebtMemberzd:CreditAgreementMemberus-gaap:LineOfCreditMember2022-01-012022-06-300001084048us-gaap:SecuredDebtMemberzd:CreditAgreementMemberus-gaap:LineOfCreditMember2022-04-012022-06-300001084048us-gaap:SecuredDebtMemberus-gaap:RevolvingCreditFacilityMember2022-04-012022-06-300001084048us-gaap:SecuredDebtMemberus-gaap:RevolvingCreditFacilityMember2022-01-012022-06-300001084048us-gaap:ConvertibleDebtMemberzd:A175ConvertibleNotesMember2021-10-072021-10-070001084048zd:A2020RepurchaseProgramMember2020-08-060001084048zd:A2020RepurchaseProgramMember2023-04-012023-06-300001084048zd:A2020RepurchaseProgramMember2022-04-012022-06-300001084048zd:A2020RepurchaseProgramMember2023-01-012023-06-300001084048zd:A2020RepurchaseProgramMember2022-01-012022-06-300001084048zd:A2020RepurchaseProgramMember2020-08-062023-06-300001084048us-gaap:SubsequentEventMemberzd:A2020RepurchaseProgramMember2023-07-012023-07-310001084048us-gaap:SubsequentEventMemberzd:A2020RepurchaseProgramMember2023-08-040001084048zd:A2015StockOptionPlanMember2023-06-300001084048zd:A2015StockOptionPlanMembersrt:MinimumMember2023-01-012023-06-300001084048us-gaap:RestrictedStockUnitsRSUMember2023-06-300001084048us-gaap:CostOfSalesMember2023-04-012023-06-300001084048us-gaap:CostOfSalesMember2022-04-012022-06-300001084048us-gaap:CostOfSalesMember2023-01-012023-06-300001084048us-gaap:CostOfSalesMember2022-01-012022-06-300001084048us-gaap:SellingAndMarketingExpenseMember2023-04-012023-06-300001084048us-gaap:SellingAndMarketingExpenseMember2022-04-012022-06-300001084048us-gaap:SellingAndMarketingExpenseMember2023-01-012023-06-300001084048us-gaap:SellingAndMarketingExpenseMember2022-01-012022-06-300001084048us-gaap:ResearchAndDevelopmentExpenseMember2023-04-012023-06-300001084048us-gaap:ResearchAndDevelopmentExpenseMember2022-04-012022-06-300001084048us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-06-300001084048us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-06-300001084048us-gaap:GeneralAndAdministrativeExpenseMember2023-04-012023-06-300001084048us-gaap:GeneralAndAdministrativeExpenseMember2022-04-012022-06-300001084048us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-06-300001084048us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-06-300001084048srt:DirectorMemberzd:RestrictedStockAndRestrictedStockUnitRSUMember2023-01-012023-06-300001084048zd:SeniorStaffMemberzd:RestrictedStockAndRestrictedStockUnitRSUMembersrt:MinimumMember2023-01-012023-06-300001084048zd:SeniorStaffMembersrt:MaximumMemberzd:RestrictedStockAndRestrictedStockUnitRSUMember2023-01-012023-06-300001084048srt:ChiefExecutiveOfficerMemberzd:RestrictedStockAndRestrictedStockUnitRSUMember2023-01-012023-06-300001084048zd:RestrictedStockAndRestrictedStockUnitRSUMember2023-01-012023-06-300001084048zd:RestrictedStockAndRestrictedStockUnitRSUMember2022-01-012022-06-300001084048zd:MarketBasedRestrictedStockAwardsMember2023-01-012023-06-30utr:D0001084048srt:MinimumMemberzd:MarketBasedRestrictedStockAwardsMember2023-01-012023-06-300001084048srt:MaximumMemberzd:MarketBasedRestrictedStockAwardsMember2023-01-012023-06-300001084048zd:MarketBasedRestrictedStockAwardsMember2022-01-012022-06-300001084048srt:MinimumMemberzd:MarketBasedRestrictedStockAwardsMember2022-01-012022-06-300001084048srt:MaximumMemberzd:MarketBasedRestrictedStockAwardsMember2022-01-012022-06-300001084048zd:RestrictedPerformanceStockMember2023-06-300001084048zd:RestrictedPerformanceStockMember2022-06-300001084048zd:RestrictedPerformanceStockMember2023-01-012023-06-300001084048zd:RestrictedPerformanceStockMember2022-01-012022-06-300001084048us-gaap:RestrictedStockMember2022-12-310001084048us-gaap:RestrictedStockMember2023-01-012023-06-300001084048us-gaap:RestrictedStockMember2023-06-300001084048us-gaap:RestrictedStockUnitsRSUMember2022-12-310001084048us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-06-300001084048zd:RestrictedStockRestrictedStockUnitRSUMarketBasedRestrictedStockMember2023-06-300001084048us-gaap:EmployeeStockMember2023-06-300001084048us-gaap:EmployeeStockMember2023-01-012023-06-300001084048us-gaap:EmployeeStockMember2022-01-012022-06-300001084048us-gaap:EmployeeStockMemberzd:A2001EmployeeStockPurchasePlanMember2023-06-300001084048us-gaap:EmployeeStockMemberzd:A2001EmployeeStockPurchasePlanMember2022-06-300001084048zd:StockOptionsAndRestrictedStockMember2023-04-012023-06-300001084048zd:StockOptionsAndRestrictedStockMember2022-04-012022-06-300001084048zd:StockOptionsAndRestrictedStockMember2023-01-012023-06-300001084048zd:StockOptionsAndRestrictedStockMember2022-01-012022-06-300001084048us-gaap:ConvertibleDebtSecuritiesMember2023-01-012023-06-300001084048us-gaap:ConvertibleDebtSecuritiesMember2022-01-012022-06-30zd:business0001084048us-gaap:OperatingSegmentsMember2023-04-012023-06-300001084048us-gaap:OperatingSegmentsMember2022-04-012022-06-300001084048us-gaap:OperatingSegmentsMember2023-01-012023-06-300001084048us-gaap:OperatingSegmentsMember2022-01-012022-06-300001084048us-gaap:CorporateNonSegmentMember2023-04-012023-06-300001084048us-gaap:CorporateNonSegmentMember2022-04-012022-06-300001084048us-gaap:CorporateNonSegmentMember2023-01-012023-06-300001084048us-gaap:CorporateNonSegmentMember2022-01-012022-06-300001084048us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-03-310001084048us-gaap:AccumulatedTranslationAdjustmentMember2023-03-310001084048us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-04-012023-06-300001084048us-gaap:AccumulatedTranslationAdjustmentMember2023-04-012023-06-300001084048us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-06-300001084048us-gaap:AccumulatedTranslationAdjustmentMember2023-06-300001084048us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-12-310001084048us-gaap:AccumulatedTranslationAdjustmentMember2022-12-310001084048us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2023-01-012023-06-300001084048us-gaap:AccumulatedTranslationAdjustmentMember2023-01-012023-06-300001084048us-gaap:RelatedPartyMember2023-06-300001084048zd:ConsensusCloudSolutionsMemberus-gaap:RelatedPartyMemberzd:SeparationTransactionMember2022-01-012022-12-310001084048zd:ConsensusCloudSolutionsMemberus-gaap:RelatedPartyMemberzd:SeparationTransactionMember2023-01-012023-06-300001084048zd:ConsensusCloudSolutionsMemberzd:VariousAgreementsMemberus-gaap:RelatedPartyMember2022-04-012022-06-300001084048zd:ConsensusCloudSolutionsMemberzd:VariousAgreementsMemberus-gaap:RelatedPartyMember2022-01-012022-06-300001084048us-gaap:RelatedPartyMember2022-04-012022-06-300001084048us-gaap:SubsequentEventMemberzd:XylaIncMember2023-07-312023-07-31


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the quarterly period ended June 30, 2023
OR
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 0-25965
ZD_Blue.jpg
ZIFF DAVIS, INC.
(Exact name of registrant as specified in its charter)
Delaware47-1053457
(State or other jurisdiction(I.R.S. Employer
of incorporation or organization)Identification No.)
114 5th Avenue New York, New York 10011 (212) 503-3500
(Address and telephone number of principal executive offices)


Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueZDNasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes ý    No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ý    No  o   
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ýAccelerated fileroNon-Accelerated fileroSmaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes        No ý

There were 46,482,817 shares outstanding of the Registrant’s common stock as of July 31, 2023.




ZIFF DAVIS, INC. AND SUBSIDIARIES 
QUARTERLY REPORT
QUARTER ENDED JUNE 30, 2023

INDEX 
   PAGE
 
    
  
  
  
  
  
    
 
    
 
    
 
    
   
 
    
 
    
 
    
 
    
 
    
 
    
 
    
 
Item 6.  
    
  
    

-2-



PART I.  FINANCIAL INFORMATION
Item 1.Financial Statements
ZIFF DAVIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands except share and per share data)
June 30, 2023December 31, 2022
ASSETS
Cash and cash equivalents$679,090 $652,793 
Short-term investments35,816 58,421 
Accounts receivable, net of allowances of $7,511 and $6,868, respectively
285,909 304,739 
Prepaid expenses and other current assets74,044 68,319 
Total current assets1,074,859 1,084,272 
Long-term investments 114,356 127,871 
Property and equipment, net of accumulated depreciation of $296,223 and $255,586, respectively
192,380 178,184 
Intangible assets, net401,639 462,815 
Goodwill1,599,896 1,591,474 
Deferred income taxes8,561 8,523 
Other assets77,598 80,131 
TOTAL ASSETS$3,469,289 $3,533,270 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable$127,145 $120,829 
Accrued employee related costs33,659 42,178 
Other accrued liabilities52,702 39,539 
Income taxes payable, current11,052 19,712 
Deferred revenue, current188,725 187,904 
Other current liabilities22,760 22,286 
Total current liabilities436,043 432,448 
Long-term debt1,000,178 999,053 
Deferred revenue, noncurrent8,303 9,103 
Income taxes payable, noncurrent8,486 11,675 
Deferred income taxes58,198 79,007 
Other long-term liabilities95,399 109,373 
TOTAL LIABILITIES1,606,607 1,640,659 
Commitments and contingencies (Note 8)
Preferred stock, $0.01 par value. Authorized 1,000,000 and none issued
  
Preferred stock - Series A, $0.01 par value. Authorized 6,000; total issued and outstanding zero
  
Preferred stock - Series B, $0.01 par value. Authorized 20,000; total issued and outstanding zero
  
Common stock, $0.01 par value. Authorized 95,000,000; total issued and outstanding 46,402,143 and 47,269,446 shares at June 30, 2023 and December 31, 2022, respectively.
464 473 
Additional paid-in capital 448,920 439,681 
Treasury stock, at cost (zero and zero shares, at June 30, 2023 and December 31, 2022, respectively).
  
Retained earnings1,492,879 1,537,830 
Accumulated other comprehensive loss(79,581)(85,373)
TOTAL STOCKHOLDERS’ EQUITY1,862,682 1,892,611 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$3,469,289 $3,533,270 

See Notes to Condensed Consolidated Financial Statements (Unaudited)
-3-



ZIFF DAVIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands except share and per share data)

Three months ended June 30,Six months ended June 30,
2023202220232022
Total revenues$326,016 $337,356 $633,158 $652,424 
Operating costs and expenses:
Cost of revenues47,421 46,004 93,151 92,104 
Sales and marketing119,934 123,777 235,854 241,539 
Research, development, and engineering17,817 19,721 35,731 38,148 
General and administrative101,949 101,967 203,212 204,184 
Total operating costs and expenses287,121 291,469 567,948 575,975 
Income from operations38,895 45,887 65,210 76,449 
Interest expense, net(10,483)(9,569)(14,963)(19,859)
Gain on debt extinguishment, net 2,613  1,393 
Unrealized loss on short-term investments held at the reporting date, net(3,196)(27,317)(23,541)(18,366)
(Loss) gain on investments, net (48,243)357 (48,243)
Other (loss) income, net(1,503)6,345 (2,411)8,744 
Income (loss) before income taxes and loss from equity method investment, net23,713 (30,284)24,652 118 
Income tax expense(6,461)(10,051)(5,845)(15,131)
Loss from equity method investment, net(573)(6,101)(9,755)(6,886)
Net income (loss)$16,679 $(46,436)$9,052 $(21,899)
Net income (loss) per common share:
Basic$0.36 $(0.99)$0.19 $(0.47)
Diluted$0.36 $(0.99)$0.19 $(0.47)
Weighted average shares outstanding: 
Basic46,798,800 46,978,709 46,892,504 47,016,351 
Diluted46,798,800 46,978,709 46,892,504 47,016,351 


 See Notes to Condensed Consolidated Financial Statements (Unaudited)
-4-



ZIFF DAVIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Unaudited, in thousands)
Three months ended June 30,Six months ended June 30,
2023202220232022
Net income (loss)$16,679 $(46,436)$9,052 $(21,899)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment2,468 (24,265)6,181 (30,530)
Consensus separation adjustment   4,056 
Change in fair value on available-for-sale investments, net of tax benefit of $239 and $130 for the three and six months ended June 30, 2023, respectively.
(713) (389) 
Other comprehensive income (loss), net of tax1,755 (24,265)5,792 (26,474)
Comprehensive (loss) income$18,434 $(70,701)$14,844 $(48,373)

See Notes to Condensed Consolidated Financial Statements (Unaudited)

-5-



ZIFF DAVIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
                                                          Six months ended June 30,
Cash flows from operating activities:20232022
Net income (loss)$9,052 $(21,899)
Adjustments to reconcile net income (loss) to net cash provided by operating activities: 
Depreciation and amortization111,479 118,943 
Non-cash operating lease costs5,924 5,913 
Share-based compensation17,619 14,420 
Provision for credit losses on accounts receivable1,819 (1,376)
Deferred income taxes, net(18,330)(10,266)
Gain on extinguishment of debt (1,393)
Loss from equity method investments9,755 6,886 
Unrealized loss on short-term investments held at the reporting date, net23,541 18,366 
(Gain) loss on investments, net(357)48,243 
Other3,834 2,106 
Decrease (increase) in: 
Accounts receivable (includes $0 and $8,351 with related parties)
20,470 77,168 
Prepaid expenses and other current assets(13,038)5,804 
Other assets(4,030)(4,990)
Increase (decrease) in: 
Accounts payable(1,332)(36,504)
Deferred revenue(1,777)(11,882)
Accrued liabilities and other current liabilities(9,594)(17,055)
Net cash provided by operating activities155,035 192,484 
Cash flows from investing activities: 
Purchases of property and equipment(55,250)(53,876)
Acquisition of businesses, net of cash received(9,492)(92,425)
Investment in available-for-sale securities (15,000)
Proceeds from sale of equity investments3,174  
Other(3,753) 
Net cash used in investing activities(65,321)(161,301)
Cash flows from financing activities: 
Payment of debt (72,853)
Proceeds from term loan 89,991 
Debt extinguishment costs (756)
Repurchase of common stock(62,678)(76,345)
Issuance of common stock under employee stock purchase plan4,724 5,235 
Proceeds from exercise of stock options 148 
Deferred payments for acquisitions(6,679)(7,094)
Other21 (5)
Net cash used in financing activities(64,612)(61,679)
Effect of exchange rate changes on cash and cash equivalents1,195 (16,056)
Net change in cash and cash equivalents26,297 (46,552)
Cash and cash equivalents at beginning of period652,793 694,842 
Cash and cash equivalents at end of period$679,090 $648,290 

See Notes to Condensed Consolidated Financial Statements (Unaudited)
-6-



ZIFF DAVIS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited, in thousands, except share amounts)

Three months ended June 30, 2023
Accumulated
Common stockAdditional
paid-in
Treasury stockRetainedother comprehensiveTotal
Stockholders’
SharesAmountcapitalSharesAmountearningslossEquity
Balance, April 1, 202347,286,093 $473 $444,813  $ $1,530,665 $(81,336)$1,894,615 
Net income— — — — — 16,679 — 16,679 
Other comprehensive loss, net of tax expense of $239
— — — — — — 1,755 1,755 
Issuance of restricted stock, net9,370 — (430)— — 73 — (357)
Issuance of shares under employee stock purchase plan87,098 1 4,724 — — — — 4,725 
Repurchase of common stock— — — 980,418 (63,900)— — (63,900)
Retirement of common stock(980,418)(10)(9,353)(980,418)63,900 (54,537)—  
Share-based compensation— — 9,217 — — — — 9,217 
Other, net— — (51)— — (1)— (52)
Balance, June 30, 202346,402,143 $464 $448,920   $1,492,879 $(79,581)$1,862,682 

Three months ended June 30, 2022
Accumulated
Common stockAdditional
paid-in
Treasury stockRetainedother comprehensiveTotal
Stockholders’
SharesAmountcapitalSharesAmountearningslossEquity
Balance, April 1, 202246,952,300 $470 $415,653  $ $1,508,802 $(59,431)$1,865,494 
Net loss— — — — — (46,436)— (46,436)
Other comprehensive loss, net of tax expense of zero
— — — — — — (24,265)(24,265)
Issuance of restricted stock, net354,407 3 (3)— — — —  
Issuance of shares under employee stock purchase plan76,741 1 5,234 — — — — 5,235 
Repurchase of common stock— — — 182,247 (12,652)— — (12,652)
Retirement of common stock(192,111)(2)(2,483)(182,247)12,652 (11,050)— (883)
Share-based compensation— — 7,703 — — — — 7,703 
Balance, June 30, 202247,191,337 $472 $426,104   $1,451,316 $(83,696)$1,794,196 

-7-



Six months ended June 30, 2023
Accumulated
Common stockAdditional
paid-in
Treasury stockRetainedother comprehensiveTotal
Stockholders’
SharesAmountcapitalSharesAmountearningslossEquity
Balance, January 1, 202347,269,446 $473 $439,681  $ $1,537,830 $(85,373)$1,892,611 
Net income— — — — — 9,052 — 9,052 
Other comprehensive loss, net of tax expense of $130
— — — — — — 5,792 5,792 
Issuance of restricted stock, net26,017 — (3,766)— — 534 — (3,232)
Issuance of shares under employee stock purchase plan87,098 1 4,724 — — — — 4,725 
Repurchase of common stock— — — 980,418 (63,900)— — (63,900)
Retirement of common stock(980,418)(10)(9,353)(980,418)63,900 (54,537)—  
Share-based compensation— — 17,619 — — — — 17,619 
Other, net— — 15 — — — — 15 
Balance, June 30, 202346,402,143 $464 $448,920   $1,492,879 $(79,581)$1,862,682 

Six months ended June 30, 2022
Accumulated
Common stockAdditional
paid-in
Treasury stockRetainedother comprehensiveTotal
Stockholders’
SharesAmountcapitalSharesAmountearningslossEquity
Balance, January 1, 202247,440,137 $474 $509,122 $ $ $1,515,358 $(57,222)$1,967,732 
Reclassification of the equity component of 1.75% Convertible Notes to liability upon adoption of ASU 2020-06
— — (88,137)— — 23,436 — (64,701)
Net loss— — — — — (21,899)— (21,899)
Other comprehensive loss, net of tax expense of zero
— — — — — — (30,530)(30,530)
Issuance of restricted stock, net455,792 4 (4)— — — —  
Issuance of shares under employee stock purchase plan76,741 1 5,234 — — — — 5,235 
Repurchase of common stock— — — 736,536 (71,337)— — (71,337)
Retirement of common stock(786,772)(7)(14,663)(736,536)71,337 (61,675)— (5,008)
Share-based compensation— — 14,420 — — — — 14,420 
Exercise of stock options5,439 — 148 — — — — 148 
Other, net— — (16)— — (3,904)4,056 136 
Balance, June 30, 202247,191,337 $472 $426,104 $ $ $1,451,316 $(83,696)$1,794,196 
See Notes to Condensed Consolidated Financial Statements (Unaudited)
-8-


ZIFF DAVIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.Basis of Presentation and Overview
The accompanying Condensed Consolidated Financial Statements of Ziff Davis, Inc. and its subsidiaries (“Ziff Davis”, the “Company”, “our”, “us”, or “we”), whether directly or indirectly wholly-owned, were prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), and all adjustments considered necessary for a fair presentation have been included. All intercompany accounts and transactions have been eliminated in consolidation.
The accompanying interim Condensed Consolidated Financial Statements have been prepared in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X issued by the Securities and Exchange Commission (“SEC”). The preparation of these Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements, as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. All normal recurring adjustments necessary for a fair presentation of these interim Condensed Consolidated Financial Statements were made.
This Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission ("SEC") on March 1, 2023 and other filings with the SEC.
The results of operations for this interim period are not necessarily indicative of the operating results for the full year or for any future period.
Description of Business
Ziff Davis, Inc. is a vertically focused digital media and internet company whose portfolio includes leading brands in technology, shopping, gaming and entertainment, connectivity, health, cybersecurity, and martech. The Company’s Digital Media business specializes in the technology, shopping, gaming and entertainment, connectivity, and healthcare markets, offering content, tools and services to consumers and businesses. The Company’s Cybersecurity and Martech business provides cloud-based subscription services to consumers and businesses including cybersecurity, privacy, and marketing technology.
 Impairment or Disposal of Long-Lived Assets
The Company assesses whether events or changes in circumstances have occurred that potentially indicate the carrying amount of definite-lived assets may not be recoverable. During the three months ended June 30, 2023 and 2022, and the six months ended June 30, 2023 and 2022, the Company recorded an impairment of approximately $0.2 million, $0.2 million, $2.0 million, and $0.2 million, respectively, related to certain operating lease right-of-use assets and other definite-lived intangibles. The Company regularly evaluates its office space requirements in light of more of its workforce working from home as part of a permanent “remote” or “partial remote” work model. The impairment is presented in general and administrative expense on the Condensed Consolidated Statement of Operations.
Recent Accounting Pronouncements
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This update provides for optional financial reporting alternatives to reduce cost and complexities associated with accounting for contracts, hedging relationships, and other transactions affected by reference rate reform. This update applies only to contracts, hedging relationships, and other transactions that reference London Interbank Offer Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The accommodations were available for all entities through December 31, 2022, with early adoption permitted. This update was later amended by ASU 2022-06.
In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. This update defers the expiration date of ASC Topic 848 from December 31, 2022 to December 31, 2024. We are currently evaluating the effect the adoption of this update will have on our condensed consolidated financial statements and related disclosures.
Reclassifications
Certain prior year reported amounts have been reclassified to conform with 2023 presentation.

-9-


ZIFF DAVIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
2.Revenues
Digital Media
Digital Media revenues are earned primarily from the delivery of advertising services and from subscriptions to services and information.
Revenue is earned from the delivery of advertising services on websites that are owned and operated by us and on those websites that are part of Digital Media’s advertising network. Depending on the individual contracts with the customer, revenue for these services is recognized over the contract period when any of the following performance obligations are satisfied: (i) when an advertisement is placed for viewing, (ii) when a qualified sales lead is delivered, (iii) when a visitor “clicks through” on an advertisement or (iv) when commissions are earned upon the sale of an advertised product.
Revenue from subscriptions is earned through the granting of access to, or delivery of, data products or services to customers. Subscriptions cover video games and related content, health information, data, and other copyrighted material. Revenues under such agreements are recognized over the contract term for use of the service. Revenues are also earned from listing fees, subscriptions to online publications, and from other sources. Subscription revenues are primarily recognized over time. Revenues related to the provision of access to historical data for certain services are recorded at the time of delivery.
We also generate Digital Media subscription revenues through the license of certain assets to clients. Assets are licensed for clients’ use in their own promotional materials or otherwise and may include logos, editorial reviews, or other copyrighted material. Revenues under such license agreements are recognized over the contract term for use of the asset. In instances when technology assets are licensed to our clients, revenues from the license of these assets are recognized over the term of the access period.
The Digital Media business also generates revenue from other sources which include marketing and production services. Such other revenues are generally recognized over the period in which the products or services are delivered.
We also generate Digital Media revenues from transactions involving the sale of perpetual software licenses, related software support and maintenance, hardware used in conjunction with its software, and other related services. Revenue is recognized for these software transactions with multiple performance obligations after (i) the contract has been approved and we are committed to perform the respective obligations and (ii) we can identify and quantify each obligation and its respective selling price. Once the respective performance obligations have been identified and quantified, revenue will be recognized when the obligations are met, either over time or at a point in time depending on the nature of the obligation.
Revenues from software license performance obligations are generally recognized upfront at the point in time that the software is made available to the customer to download and use. Revenues for related software support and maintenance performance obligations are related to technical support provided to customers as needed and unspecified software product upgrades, maintenance releases, and patches during the term of the support period when they are available. We are obligated to make the support services available continuously throughout the contract period. Therefore, revenues for support contracts are generally recognized ratably over the contractual period the support services are provided. Hardware product and related software performance obligations, such as an operating system or firmware, are highly interdependent and interrelated and are accounted for as a bundled performance obligation. The revenues for this bundled performance obligation are generally recognized at the point in time that the hardware and software products are delivered and ownership is transferred to the customer. Other service revenues are generally recognized over time as the services are performed.
The Company records revenue on a gross basis with respect to revenue generated (i) by the Company serving online display and video advertising across its owned and operated web properties, on third-party sites, or on unaffiliated advertising networks; (ii) through the Company’s lead-generation business; and (iii) through the Company’s subscriptions. The Company records revenue on a net basis with respect to revenue paid to the Company by certain third-party advertising networks who serve online display and video advertising across the Company’s owned-and-operated web properties and certain third-party sites.
Cybersecurity and Martech
The Company’s Cybersecurity and Martech revenues substantially consist of subscription revenues which include subscription and usage-based fees, a significant portion of which are paid in advance. The Company defers the portions of monthly, quarterly, semi-annual, and annual fees collected in advance of the satisfaction of performance obligations and recognizes them in the period earned.
-10-


ZIFF DAVIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Along with its numerous proprietary Cybersecurity and Martech solutions, the Company also generates subscription revenues by reselling various third-party solutions, primarily through its email security line of business. These third-party solutions, along with the Company’s proprietary products, allow it to offer customers a variety of solutions to better meet the customer’s needs. The Company records revenue on a gross basis with respect to reseller revenue because the Company has control of the specified good or service prior to transferring control to the customer.
Revenues from external customers classified by revenue source are as follows (in thousands).
Three months ended June 30,Six months ended June 30,
2023202220232022
Digital Media
Advertising$175,083 $189,198 $331,165 $359,265 
Subscription68,161 58,901 137,309 114,477 
Other9,626 10,601 18,607 19,785 
Total Digital Media revenues$252,870 $258,700 $487,081 $493,527 
Cybersecurity and Martech
Subscription$73,196 $78,910 $146,212 $159,404 
Total Cybersecurity and Martech revenues$73,196 $78,910 $146,212 $159,404 
Elimination of inter-segment revenues(50)(254)(135)(507)
Total Revenues$326,016 $337,356 $633,158 $652,424 
Timing of revenue recognition
Point in time$11,661 $9,202 $23,182 $18,185 
Over time314,355 328,154 609,976 634,239 
Total$326,016 $337,356 $633,158 $652,424 
The Company has recorded $30.3 million and $49.8 million of revenue for the three months ended June 30, 2023 and 2022, respectively, and $95.4 million and $122.7 million of revenue for the six months ended June 30, 2023 and 2022, respectively, which was previously included in the deferred revenue balance as of the beginning of each respective year.
Transaction Price Allocation to Future Performance Obligations
As of June 30, 2023, the aggregate amount of transaction price that is allocated to future performance obligations was approximately $15.6 million and is expected to be recognized as follows: 60% by December 31, 2023, 38% by December 31, 2025, and 2% thereafter. The amount disclosed does not include revenues related to performance obligations that are part of a contract with original expected duration of twelve months or less or portions of the contract that remain subject to cancellations.

3.Business Acquisitions
The Company uses acquisitions as a strategy to grow its customer base by increasing its presence in new and existing markets, expand and diversify its service offerings, enhance its technology, and acquire skilled personnel.
2023 Acquisitions
The Company completed two immaterial Digital Media acquisitions during the six months ended June 30, 2023, paying the purchase price in cash in each transaction.
The Condensed Consolidated Statement of Operations since the date of each acquisition and the Condensed Consolidated Balance Sheets as of June 30, 2023, reflect the results of operations of the 2023 acquisitions. The initial accounting for the 2023 acquisitions is incomplete due to timing of available information and is subject to change. The Company has recorded provisional amounts which may be based upon past acquisitions with similar attributes for certain intangible assets (including trade names and customer relationships), preliminary acquisition date working capital, and related tax items.
-11-


ZIFF DAVIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Goodwill recognized associated with these acquisitions during the six months ended June 30, 2023 was $6.6 million, all of which is expected to be deductible for income tax purposes. Approximately $7.2 million of definite-lived intangibles were recorded in connection with the acquisitions during the six months ended June 30, 2023.
2022 Acquisitions
The Company completed the following acquisitions during the six months ended June 30, 2022, paying the purchase price in cash in each transaction: (a) a purchase of 100% of equity interests of Lifecycle Marketing Group Limited, acquired on January 21, 2022, a United Kingdom-based portfolio of pregnancy and parenting brands, including Emma’s Diary and Health Professional Academy, reported within our Digital Media segment; (b) a purchase of 100% of equity interests of FitNow, Inc, acquired on June 2, 2022, a Massachusetts-based provider of weight loss products and support, reported within our Digital Media segment; and (c) two other immaterial Digital Media acquisitions. During the six months ended June 30, 2023, the purchase price accounting was finalized for these acquisitions.
The Condensed Consolidated Statement of Operations since the date of each acquisition reflects the results of operations of all 2022 acquisitions. For the six months ended June 30, 2022, these acquisitions contributed $7.4 million to the Company’s revenues. Net income contributed by these acquisitions was not separately identifiable due to the Company’s integration activities and is impracticable to provide. Total consideration for these transactions was $107.1 million, net of cash acquired and assumed liabilities.
The following table summarizes the allocation of the purchase consideration for all 2022 acquisitions as of June 30, 2022 (in thousands):
Assets and LiabilitiesValuation
Accounts receivable$6,703 
Prepaid expenses and other current assets897 
Property and equipment370 
Trade names11,902 
Customer relationships22,170 
Other intangibles16,830 
Goodwill81,725 
Other long-term assets11 
Accounts payable and accrued expenses(3,383)
Deferred revenue(19,274)
Deferred tax liability(10,485)
Other long-term liabilities(326)
Total$107,140 
The fair value of the assets acquired includes accounts receivable of $6.7 million, of which none is expected to be uncollectible. The Company did not acquire any other classes of receivables as a result of its acquisitions.
Goodwill recognized associated with these acquisitions during the six months ended June 30, 2022 was $81.7 million, of which $1.2 million is expected to be deductible for income tax purposes.
Unaudited Pro Forma Financial Information for All 2022 Acquisitions
The following unaudited pro forma information is not necessarily indicative of the Company’s consolidated results of operations in future periods or the results that actually would have been realized had the Company and the acquired businesses been combined companies during the periods presented. These pro forma results are estimates and exclude any savings or synergies that would have resulted from these business acquisitions had they occurred on January 1, 2022. This unaudited pro forma supplemental information includes incremental intangible asset amortization and other charges as a result of the acquisitions, net of the related tax effects.
-12-


ZIFF DAVIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
The supplemental information on an unaudited pro forma financial basis presents the combined results of the Company and its acquisitions during the three and six months ended June 30, 2022 as if each acquisition had occurred on January 1, 2022 (in thousands, except per share amounts):
 Three months ended June 30, 2022Six months ended June 30, 2022
 (unaudited)(unaudited)
Revenues$343,275 $668,309 
Net income $(46,300)$(21,543)
Income per common share - Basic$(0.99)$(0.46)
Income per common share - Diluted$(0.99)$(0.46)

4.Investments
Investments consist primarily of equity and debt securities.
Investment in equity securities
On October 7, 2021, the Company completed the separation of its cloud fax business (the “Separation”) into an independent publicly traded company, Consensus Cloud Solutions, Inc. (“Consensus”). Following the Separation, the Company retained shares of Consensus common stock and as of June 30, 2023 and December 31, 2022, the Company held approximately 1.0 million and 1.1 million shares, respectively, of the common stock of Consensus. As of June 30, 2023 and December 31, 2022, the carrying value of the investment in Consensus was $32.1 million and $58.4 million, respectively, and was included in ‘Short-term investments’ in the Condensed Consolidated Balance Sheets. The Company accounts for its investment in Consensus at fair value under the fair value option, and the related fair value gains and losses are recognized in earnings.
During the three months ended June 30, 2022, the Company completed the non-cash tax-free debt-for-equity exchange of 2,300,000 shares of its common stock of Consensus for the extinguishment of $90.0 million of principal of the Company’s Term Loan Facility (as defined in Note 7 - Debt), and related interest. During the three and six months ended June 30, 2023, the Company sold zero and 52,393 shares of common stock of Consensus in the open market.
Losses on equity securities were recorded in ‘Unrealized loss on short-term investments held at the reporting date, net’ in the Condensed Consolidated Statements of Operations consisted of the following (in thousands):
Three months ended June 30,Six months ended June 30,
2023202220232022
Net losses during the period$(3,196)$(75,560)$(23,184)$(66,609)
Less: (losses) gains on securities sold during the period (48,243)357 (48,243)
Unrealized losses recognized during the period on short-term investments held at the reporting date, net$(3,196)$(27,317)$(23,541)$(18,366)
Investment in corporate debt security
On April 12, 2022, the Company entered into an agreement with an entity to acquire 4% convertible notes with an aggregate value of $15.0 million. On May 19, 2023, the Company entered into the Note Amendment Agreement (the “Amendment”) with respect to the same entity. The Amendment increased the interest rate on the convertible notes to 6%, extended the maturity date, and subordinated all existing and future obligations, liabilities and indebtedness of the entity to the entity’s senior creditor, as defined in the Amendment. This investment is included in ‘Long-term investments, net’ in the Condensed Consolidated Balance Sheets and is classified as available-for-sale. The investment was initially measured at its transaction price and subsequently remeasured at fair value, with unrealized gains and losses reported as a component of other comprehensive income.
As of June 30, 2023, both the carrying value and the maximum exposure of the Company’s investment in corporate debt securities was approximately $15.1 million, with a contractual maturity date that is more than one year but less than five years. As of December 31, 2022, both of the carrying value and the maximum exposure of the Company’s equity method investment in corporate debt securities was approximately $15.6 million. Cumulative gross unrealized gains on investment in corporate debt securities as of June 30, 2023 and December 31, 2022 was approximately $0.1 million and $0.6 million, respectively.
-13-


ZIFF DAVIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
 There were no investments in an unrealized loss position as of June 30, 2023 and December 31, 2022.
As of June 30, 2023 and December 31, 2022, the Company did not recognize any other-than-temporary impairment losses on its debt securities.
Equity method investment
On September 25, 2017, the Company entered into a commitment to invest in an investment fund (the “OCV Fund”). The primary purpose of the OCV Fund is to provide a limited number of select investors with the opportunity to realize long-term appreciation from public and private companies, with a particular focus on the technology and life science industries. The general activities of the OCV Fund is to buy, sell, hold, and otherwise invest in securities of every kind and nature and rights and options with respect thereto, including, without limitation, stock, notes, bonds, debentures, and evidence of indebtedness; to exercise all rights, powers, privileges, and other incidents of ownership or possession with respect to securities held or owned by the OCV Fund; to enter into, make, and perform all contracts and other undertakings; and to engage in all activities and transactions as may be necessary, advisable, or desirable to carry out the foregoing.
During both the six months ended June 30, 2023 and 2022, the Company received no distributions from OCV.
The Company recognizes its equity in the net earnings or losses relating to the investment in OCV on a one-quarter lag (including management fees) due to the timing and availability of financial information from OCV. If the Company becomes aware of a significant decline in value that is other-than-temporary, the loss will be recorded in the period in which the Company identifies the decline.
During the three months ended June 30, 2023 and 2022, the Company recognized a loss from equity method investment of $0.6 million and $6.1 million, net of tax benefit, respectively. During the six months ended June 30, 2023 and 2022, the Company recognized a loss from equity method investment of $9.8 million and $6.9 million, net of tax benefit, respectively. The losses during the three months ended June 30, 2023 and 2022 and during the six months ended June 30, 2023 and 2022 were primarily the result of losses in the underlying investments and the loss during the three and six months ended June 30, 2022 in connection with management fee expense. The Company did not recognize management fee expense in 2023. During the three and six months ended June 30, 2022, the Company recognized expense for management fees of $0.8 million and $1.5 million, respectively, net of tax benefit.
As of June 30, 2023, both of the carrying value and the maximum exposure of the Company’s equity method investment was $99.3 million. As of December 31, 2022, both of the carrying value and the maximum exposure of the Company’s equity method investment was $112.3 million. These equity securities are included within ‘Long-term investments’ in the Condensed Consolidated Balance Sheets.
As a limited partner, the Company’s maximum exposure to loss is limited to its proportional ownership in the partnership. In addition, the Company is not required to contribute any future capital and any expected losses will not be in excess of the capital account. Finally, there are no call or put options, or other types of arrangements, which limit the Company’s ability to participate in losses and returns of the Fund.

5.Fair Value Measurements
The Company complies with the provisions of ASC 820, which defines fair value, provides a framework for measuring fair value and expands the disclosures required for fair value measurements of financial and non-financial assets and liabilities. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value.
§Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
§Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
§Level 3 – Unobservable inputs which are supported by little or no market activity.
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
-14-


ZIFF DAVIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
The Company’s money market funds are classified within Level 1. The Company values these Level 1 investments using quoted market prices.
The Company’s investment in Consensus’ common stock for which the Company elected the fair value option, and the fair value of the Company’s investment in Consensus and subsequent fair value changes, are included in our assets and changes in fair value are recognized in earnings. As the initial carrying value of the investment in Consensus was negative immediately following the Separation, the Company elected the fair value option under ASC 825-10-25 to support the initial recognition of the investment in Consensus at fair value and the negative book value was recorded as a gain at the date of Separation. The fair value of the investment in Consensus is determined using quoted market prices, which is a Level 1 input.
The Company has investment in a corporate debt security that does not have a readily determinable fair value because acquired securities are privately held, not traded on any public exchanges and not an investment in a mutual fund or similar investment. The fair value of the corporate debt securities is determined primarily based on significant estimates and assumptions, including Level 3 inputs. As of June 30, 2023 and December 31, 2022, the fair value was determined based upon various probability-weighted scenarios which included discount rate assumptions between 12% - 13%, depending on the probability scenario. In addition, the determination of fair value included a conversion timeframe of one to three years, depending on probability scenario, as of June 30, 2023 and approximately one-year as of December 31, 2022.
The fair value of the Company’s 4.625% Senior Notes and 1.75% Convertible Notes (as defined in Note 7 - Debt) was determined using quoted market prices or dealer quotes for instruments with similar maturities and other terms and credit ratings, which are Level 1 inputs. If such information is not available for the 1.75% Convertible Notes, the fair value is determined using cash-flow models of the scheduled payments discounted at market interest rates for comparable debt without the conversion feature.
The Company classifies its contingent consideration liability in connection with acquisitions within Level 3 because factors used to develop the estimated fair value are unobservable inputs, such as volatility and market risks, and are not supported by market activity. The valuation approaches used to value Level 3 investments considers unobservable inputs in the market such as time to liquidity, volatility, dividend yield, and breakpoints. Significant increases or decreases in either of the inputs in isolation would result in a significantly lower or higher fair value measurement. As of June 30, 2023 and December 31, 2022, the contingent consideration was determined using a 100% probability of payout at the maximum amount, without any other estimates applied.
The following tables present the fair values of the Company’s financial assets or liabilities that are measured at fair value on a recurring basis (in thousands):
June 30, 2023Level 1Level 2Level 3Fair ValueCarrying Value
Assets:
Cash equivalents:
Money market and other funds$304,914 $ $ $304,914 $304,914 
Short-term investments:
Certificates of deposit 3,753  3,753 3,753 
Consensus common stock32,063   32,063 32,063 
Long-term investments:
Investment in corporate debt securities  15,067 15,067 15,067 
Total assets measured at fair value$336,977 $3,753 $15,067 $355,797 $355,797 
Liabilities:
Contingent consideration$ $ $3,389 $3,389 $3,389 
Debt:
4.625% Senior Notes
399,658   399,658 456,596 
1.75% Convertible Notes
515,625   515,625 543,582 
Total liabilities measured at fair value$915,283 $ $3,389 $918,672 $1,003,567 

-15-


ZIFF DAVIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
December 31, 2022Level 1Level 2Level 3Fair ValueCarrying Value
Assets:
Cash equivalents:
Money market and other funds$312,010 $ $ $312,010 $312,010 
Short-term investments:
Consensus common stock58,421   58,421 58,421 
Long-term investments:
Investment in corporate debt securities  15,586 15,586 15,586 
Total assets measured at fair value$370,431 $ $15,586 $386,017 $386,017 
Liabilities:
Contingent consideration$ $ $555 $555 $555 
Debt:
4.625% Senior Notes
390,908   390,908 456,400 
1.75% Convertible Notes
548,411   548,411 542,653 
Total liabilities measured at fair value$939,319 $ $555 $939,874 $999,608 
At the end of each reporting period, management reviews the inputs to the fair value measurements of financial and non-financial assets and liabilities to determine when transfers between levels are deemed to have occurred. For the six months ended June 30, 2023 and 2022, there were no transfers that occurred between levels.
The following table presents a reconciliation of the Company’s Level 3 financial assets related to our contingent consideration arrangements and investment in corporate debt securities that are measured at fair value on a recurring basis (in thousands):
Six months ended June 30,
20232022
Contingent Consideration ArrangementsCorporate Debt SecuritiesContingent Consideration ArrangementsCorporate Debt Securities
Balance as of January 1$555 $15,586 $5,775 $ 
Fair value at date of acquisition2,834  200 15,000 
Fair value adjustments (1)
 (519)(9) 
Payments  (2,919) 
Balance as of June 30$3,389 $15,067 $3,047 $15,000 
(1)The fair value adjustments to the contingent consideration arrangements in the table above were recorded within ‘General and administrative’ on the Condensed Consolidated Statements of Operations during the three and six months ended June 30, 2023 and 2022. The fair value adjustments to the corporate debt securities in the table above were recorded within ‘Change in fair value on available-for-sale investments, net’ on the Condensed Consolidated Statements of Comprehensive (Loss) Income during the three and six months ended June 30, 2023 and 2022.

The Company’s non-financial assets, such as goodwill, intangible assets, right-of-use assets, and property, plant and equipment, are adjusted to fair value only when an impairment is recognized. Such fair value measurements are based predominately on Level 3 inputs.

-16-


ZIFF DAVIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
6.Goodwill and Intangible Assets
Goodwill
The changes in carrying amounts of goodwill for the six months ended June 30, 2023 are as follows (in thousands):
Digital MediaCybersecurity and MartechConsolidated
Balance as of January 1, 2023$1,065,989 $525,485 $1,591,474 
Goodwill acquired (Note 3)
6,555  6,555 
Purchase accounting adjustments (1)
(72) (72)
Foreign exchange translation247 1,692 1,939 
Balance as of June 30, 2023$1,072,719 $527,177 $1,599,896 
(1)Purchase accounting adjustments relate to measurement period adjustments to goodwill in connection with prior business acquisitions.
Goodwill as of June 30, 2023 and December 31, 2022 reflects accumulated impairment losses of $27.4 million and $27.4 million, respectively, in the Digital Media reportable segment.
Intangible Assets Subject to Amortization
As of June 30, 2023, intangible assets subject to amortization relate primarily to the following (in thousands):
Weighted-Average
  Amortization
Period
Historical
Cost
Accumulated
Amortization
Net
Trade names10 years$263,700 $137,103 $126,597 
Customer relationships (1)
8 years692,399 516,458 175,941 
Other purchased intangibles9 years478,282 379,181 99,101 
Total$1,434,381 $1,032,742 $401,639 
(1)The Company amortizes customer relationship assets in a pattern that best reflects the pace at which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset.
As of December 31, 2022, intangible assets subject to amortization relate primarily to the following (in thousands):
Weighted-Average
  Amortization
Period
Historical
Cost
Accumulated
Amortization
Net
Trade names10 years$261,614 $125,422 $136,192 
Customer relationships (1)
8 years687,798 479,741 208,057 
Other purchased intangibles8 years481,973 363,407 118,566 
Total$1,431,385 $968,570 $462,815 
(1)The Company amortizes customer relationship assets in a pattern that best reflects the pace at which the asset’s benefits are consumed. This pattern results in a substantial majority of the amortization expense being recognized in the first 4 to 5 years, despite the overall life of the asset.
Amortization expense, included in General and administrative expense on the Condensed Consolidated Statements of Operations, was approximately $35.3 million and $41.8 million for the three months ended June 30, 2023 and 2022, respectively, and $68.6 million and $83.0 million for the six months ended June 30, 2023 and 2022.

-17-


ZIFF DAVIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
7.Debt
Long-term debt consists of the following (in thousands):
June 30, 2023December 31, 2022
4.625% Senior Notes
$460,038 $460,038 
1.75% Convertible Notes
550,000 550,000 
Total Notes1,010,038 1,010,038 
Credit Agreement  
Less: Unamortized discount(2,615)(2,764)
Deferred issuance costs(7,245)(8,221)
Total long-term debt$1,000,178 $999,053 
As of June 30, 2023, $550.0 million of principal will mature in 2026 and $460.0 million of principal will mature in 2030.
4.625% Senior Notes
On October 7, 2020, the Company completed the issuance and sale of $750.0 million aggregate principal amount of its 4.625% senior notes due 2030 (the “4.625% Senior Notes”) in a private placement offering exempt from the registration requirements of the Securities Act of 1933. The Company received proceeds of $742.7 million after deducting the initial purchasers’ discounts, commissions and offering expenses. The net proceeds were used to redeem all of its outstanding 6.0% Senior Notes due in 2025 and, the remaining net proceeds were available for general corporate purposes which may include acquisitions and the repurchase or redemption of other outstanding indebtedness.
These senior notes bear interest at a rate of 4.625% per annum, payable semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2021. The 4.625% Senior Notes mature on October 15, 2030, and are senior unsecured obligations of the Company which are guaranteed, jointly and severally, on an unsecured basis by certain of the Company’s existing and future domestic direct and indirect wholly-owned subsidiaries (collectively, the “Guarantors”). If the Company or any of its restricted subsidiaries acquires or creates a domestic restricted subsidiary, other than an Insignificant Subsidiary (as defined in the indenture pursuant to which the 4.625% Senior Notes were issued (the “Indenture”)), after the issue date, or any Insignificant Subsidiary ceases to fit within the definition of Insignificant Subsidiary, such restricted subsidiary is required to unconditionally guarantee, jointly and severally, on an unsecured basis, the Company’s obligations under the 4.625% Senior Notes.
The Company may redeem some or all of the 4.625% Senior Notes at any time on or after October 15, 2025 at specified redemption prices plus accrued and unpaid interest, if any, up to, but excluding the redemption date. Before October 15, 2023, and following certain equity offerings, the Company also may redeem up to 40% of the 4.625% Senior Notes at a price equal to 104.625% of the principal amount, plus accrued and unpaid interest, if any, up to, but excluding the redemption date. The Company may make such redemption only if, after such redemption, at least 50% of the aggregate principal amount of the 4.625% Senior Notes remains outstanding. In addition, at any time prior to October 15, 2025, the Company may redeem some or all of the 4.625% Senior Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, plus an applicable “make-whole” premium. The discount and deferred issuance costs are being amortized, at an effective interest rate of 4.7%, to interest expense through the maturity date.
The Indenture contains covenants that restrict the Company’s ability to (i) pay dividends or make distributions on the Company’s common stock or repurchase the Company’s capital stock; (ii) make certain restricted payments; (iii) create liens or enter into sale and leaseback transactions; (iv) enter into transactions with affiliates; (v) merge or consolidate with another company; and (vi) transfer and sell assets. These covenants contain certain exceptions. Restricted payments are applicable only if the Company and subsidiaries designated as restricted subsidiaries have a net leverage ratio of greater than 3.5 to 1.0. In addition, if such net leverage ratio is in excess of 3.5 to 1.0, the restriction on restricted payments is subject to various exceptions, including the total aggregate amount not exceeding the greater of (A) $250 million and (B) 50.0% of EBITDA for the most recently ended four fiscal quarter period ended immediately prior to such date for which internal financial statements are available. The Company is in compliance with its debt covenants for the 4.625% Senior Notes as of June 30, 2023.
-18-


ZIFF DAVIS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued
Repurchases of 4.625% Senior Notes on the open market were as follows (in thousands):
Three months ended June 30, 2022Six months ended June 30, 2022
Principal repurchased$21,494 $76,103 
Aggregate purchase price$18,245 $73,610 
Gain on repurchase (1)
$3,069 $1,849 
(1)Presented within ‘Gain (loss) on debt extinguishment, net” on the Condensed Consolidated Statements of Operations.
Cumulatively as of June 30, 2023, the Company repurchased approximately $290 million in aggregate principal of its 4.625% Senior Notes.
1.75% Convertible Notes
On November 15, 2019, the Company issued $550.0 million aggregate principal amount of 1.75% convertible senior notes due November 1, 2026 (the “1.75% Convertible Notes”). The Company received proceeds of $537.1 million in cash, net of purchasers’ discounts and commissions and other debt issuance costs. A portion of the net proceeds were used to pay off all amounts outstanding under the then-existing Credit Facility. The 1.75% Convertible Notes bear interest at a rate of 1.75% per annum, payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2020. The 1.75% Convertible Notes will mature on November 1, 2026, unless earlier converted or repurchased.
Under certain conditions set forth in the indenture, the 1.75% Convertible Notes bear additional interest of 0.50% per annum payable semiannually in arrears on May 1 and November 1 of each year, beginning on May 1, 2021. During the three and six months ended June 30, 2023, the Company recorded an additional $7.4 million of interest expense related to the 1.75% Convertible Notes for such additional interest that accumulated through June 30, 2023. On August 1, 2023, $7.0 million of this interest obligation was paid by the Company to the trustee under the indenture for the 1.75% Convertible Notes which will be payable to holders of record in August 2023. The Company will record additional interest of approximately $0.3 million in the third quarter of 2023 and the Company will pay its remaining obligation of approximately $0.7 million on November 1, 2023. As of August 1, 2023, the Company has complied with the conditions set forth in the indenture. As such, the cumulative $7.7 million interest expense will be non-recurring.
Holders may surrender their 1.75% Convertible Notes for conversion at any time prior to the close of business on the business day immediately preceding July 1, 2026 only under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on March 31, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding the calendar quarter is greater than 130% of the applicable conversion price of the 1.75% Convertible Notes on each such applicable trading day; (ii) during the five business day period following any 10 consecutive trading day period in which the trading price per $1,000 principal amount of 1.75% Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on each such trading day; or (iii) upon the occurrence of specified corporate events. On or after July 1, 2026, and prior to the close of business on the business day immediately preceding the maturity date, holders may convert all or any portion of their notes at any time, regardless of the foregoing circumstances. The Company will settle conversions of the 1.75% Convertible Notes by paying or delivering, as the case may be, cash, shares of the Company’s common stock or a combination thereof at the Company’s election. The Company currently intends to satisfy its conversion obligation by paying and delivering a combination of cash and shares of the Company’s common stock. Holders of the notes will have the right to require the Company to repurchase for cash all or any portion of their notes upon the occurrence of certain corporate events, subject to certain conditions. As of June 30, 2023 and December 31, 2022, the market trigger conditions did not meet the conversion requirements of the 1.75% Convertible Notes and, accordingly, the 1.75% Convertible Notes are classified as long-term debt on our Condensed Consolidated Balance Sheets.
As of June 30, 2023, the conversion rate is 9.3783 shares of the Company’s common stock for each $1,000 principal amount of 1.75% Convertible Notes (or 5,158,071 shares), which represents a conversion price of approximately $106.63 per share of the Company’s common stock. The conversion rate is subject to adjustment for certain events as set forth in the indenture governing the 1.75% Convertible Notes, but will not be adjusted for accrued interest. In addition, upon the occurrence of a “Make-Whole Fundamental Change” (as