Earnings call transcript Q4 2022

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Operator

Good day, ladies and gentlemen, and welcome to the Ziff Davis fourth quarter and year-end 2022 earnings call. My name is Paul, and I will be the operator assisting you today. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

be Chief CEO Davis. Financial will and Ziff call Richter, Bret Officer this Vivek of Shah, Davis; On of Ziff will Davis. call Financial the now Bret I Chief Richter, over Officer to Ziff of turn Thank you.

may You begin.

Bret Richter

Thank Davis QX conference Ziff to investor morning, you. year call XXXX. everyone, Good fiscal welcome the and and for

today's available website. I'm our is A I’m Chief launch Executive our you mentioned, operator Financial button presentation the there by the webcast, presentation available Richter, to side, the Chief the copy this of you Officer Vivek on on joined Shah. call. of When As a Bret Ziff is the allow for Davis, A and which is slides. will expand viewer right-hand on Officer,

of it may If press the you have through corporate www.ziffdavis.com. release, access not at website copy a our you received

addition, able In for conducting instruct site. the time webcast After we'll from Q&A. regarding the the you The this access be formal operator questions. will presentation, that a be completing to at asking you'll procedures

In addition, to investor@ziffdavis.com. questions can email you

our prepared read Safe to the remarks, me allow language. begin Harbor we Before

this the call know, cause risks results include would webcast materially uncertainties the statements may you As involve forward-looking statements. and differ to actual anticipated that will results. from Such and

as filings, factors filings, and forward-looking XX-K of recent that we the risk documents XX-Q to for those additional well have have are discussions various Some risk factors risks uncertainties show you language, this of statements. our not safe filings, well as refer slide those harbor statements as regarding as We that as filings, SEC disclosed we included part but webcast. the include, in limited X-K and including to, in proxy our

his to turn the me let over Vivek Now, for call remarks.

Vivek Shah

digital morning, you, everyone. challenging the particularly and market. Bret, good for and advertising businesses in These media times, Thank are

this environment uncomplicated. Our strategy in is difficult

risks portfolio. in focus and First, the earnings mitigating on

invest Second, resources and through of the organic reallocation costs. growth for careful

quality to continue And acquire that assets. sheet talent build retain position so in the and fourth, attract our we're best and in accretive our Third, to markets. a balance highly

quarter, we revenues. over the a by For our in decline nearly grew EBITDA adjusted notwithstanding fourth X%, X%

grew have For divested growth X%. to revenue adjusted X%, revenue, climate, in excluding the our nearly and XXXX, nearly also We're this year EBITDA margin adjusted by generated proud by EBITDA basis XXX expanding full assets, we by points. our while

of we was consistent what represents we While the in which take that in year. organic solace in quarter quarter, particularly revenue experienced of QX, organic fiscal experienced an the in fourth QX our decline some flattening we decline, largest the with

outlook texture always it's described quarter. let a XXXX in the and declined provide useful this by revenues in category. unpack Like to but our moment, me QX X% by some in previous fiscal I've discuss results. I’ll around XXXX our Advertising quarters,

as I continue at see which, in last think resources. smaller for mid-single bright release we digits, was said up titles. of most single can been vertical, a be that Where spot vertical, decline that low to offers.com pleased grew allocating delay QX we due to decline Our the to a some digit AAA XXXX, were addressed In see flat. our call, shopping RetailMeNot has is a saw gaming our largely which of by we additional in the property, following the

that prior upfronts high consumer with QX shoots our both up green spot advertising low did buying volume the digits is health as single Our high bright digits, ad year-over-year. professional we're pharma materialize years. of business some XXXX The was seeing down in ad typical not single and as businesses, in

challenge diversification This having yet as categories, to play has this and be advantage. said us, quarter, to including need healthcare, category is gaming and cycle been another but shopping, a is competitive I where saw we for the to that entertainment, As believe out, a decline. tech multiple double-digit for present biggest will across the entire continues continues case year, sector the challenges our last and tech, we itself

quarter. revenues over Subscription in grew X% the

We strong and our the business, of as been and double grower growth with broadband connectivity category-leading organic in continue eight services the of Connectivity revenues last gains a we market. have up total capabilities through to and out digits benefit acquisition. brands believe the a strong RootMetrics assembled consistent over we organic see roster revenue very has of years, the carefully

in are helping and development ongoing products digital instrumental needs. and to their Our businesses growing of individuals infrastructure, tools to connectivity meet the and designed access be solutions

and take We're a highly public well has Bye, including Sprint, see deployment network intelligence, very is served he Spire, in combination the in was recently where lead and and Chief the a it. at veteran, instrumental nine been establishing broadband XG and deployment, Officer engineering to as Stephen worldwide President, skill, have also companies. RootMetrics, development of business its and development, new standalone and fantastic wireless connectivity to Stephen C technical design, the with Dish to and level. us rare respected We space, Technology why Of senior in roles widely connectivity at Dish’s Board we as made president as It's He industry at of had industry, recruited a insights. of network is Ookla, growth-oriented known Stephen private Directors, Officer of Commercial telecommunications of financial has in multinational excited and DownDetector, AT&T. Ekahau, and a He very in Cox the acumen. Chief our strong acquisitions and leader next Stephen possesses Network, and success having to business as appointed the optimization, companies, network.

XX% of a by decline businesses versus QX, with a rates Approximately percentage Our in driven to FX had close cybersecurity challenging favorable and less QX was MarTech points XXXX. revenues. two decline

year, in XX% revenue, was in flat up excluding businesses, and divested the For the EBITDA. business the essentially nearly adjusted

that on mainly our on bottom we buying line, in made good cybersecurity to we in our in believe experience have on new In and localization, progress direct-to-consumer launching org stride QX, some believe should us challenges job BXB other solutions. outside hit wins with We enhancements customers, especially options, with front, growing while customer North we security we've started in excellent acquire sales QX, this new our new payment logo to nice front ipvanish.com, So, acquisition our done for continue an cybersecurity its America. subscription offerings. business, the of email help our

were Obviously, saw very margins. down We margin managed about word we a XX%. about over throughout headcount expansion conscious the XXXX. headcount in Just We our year. strong by

surprised work managing was reduction disruptive expenses more us While demonstrates where XXXX. QX, returns, continuing to attrition. force company, we we in do hard to we shifts. Notwithstanding headcount promising XXXX achieved to by or our of so plan half manage to on allowed be natural market a Doing hiring see to managing are the focus manner costs, in through hire than positions that it's that execute in the not and to unprepared out a further that FTE point continue important did reduction and we in we key for wasn't

attractive be pursue. want There growth to in we company the that opportunities sure to are too many

growing cybersecurity, LoseIt. our funnel and content creation great qualified we wellness For opportunity value our markets In where like business, email In new and vertical, with a we business. RetailMeNot longstanding nurse to this better seeing members who eCareers with At doctor for recruitment believe to a of install are and can engagement we Health DTC top alongside have channel HCPs performance. healthcare and security leveraging we email businesses offers economics business engage recruitment extension. vertical, instance, job listings top business, build drive marketing campaign customers In business, employers, traffic and growing with unlock expertise leveraging cashback our we connect unit larger and we're by grow our MarTech, our our in shopping our delivery to in our partners. we're rapidly in to with browser signals health the customers building

particularly experienced get of into the As second second we first we growth the about will given the think to comps. organic sequentially, improve that then XXXX, as of anticipate we we in and lower declines into half quarter, benefit continue start the XXXX, half, the

that call on in do based we We the from some we're it's year acquisitions in seeing benefit the very business. there feel have be might revenue shoots difficult to green prior While bottom as we some markets, declining well.

margin acquisitions in confident and So, margin, about match depending some that XXXX’s single meaningful we're prospective see in could but see of from current end growth persistent these our at upside. to including challenges should X%, point any on high total we With low represent into scale, the perspective, also we're revenue to EBITDA XX.X% adjusted could a range. declined respect timing not our full-year could of the we the abilities estimates, our which, if out digits. I by half, then total second revenues

of the and narrowing two over EBITDA. bottom of flow-through ratio nature $XXX XXXX and XXX growth. finished and continue basis with given Towards our of fund our We our a revenues, of end given by million over margins we to anticipate times commitment range, points, to the would future cash much investments, high gross of debt

Our powder have been and patient. we is dry,

a as The was remainder $XXX which COVID-XX. over asset But that the onset of we QX that the didn't nearly year. last last in happened acquire deployed XXXX. didn't single long, XXXX, we was that fact, QX In of million time of

tech, active, well gaming, very eighth as currently connectivity, at each looking opportunities acquisitions platforms, shopping, are platform. health, cybersecurity, could our as MarTech, seven of that We represent an and for

targets we in update as years provide best Davis comprehensive is I'm our known meet and me two, are emissions working near-term be reduction science-based and committed And to SBTI emissions reduction targets, on target-setting. November, Targets to we them. our submitted in March, exciting, pleased over with because to to several SBTI the for defines with Last next efforts. an three the validation. Science-Based share that targets This we'll one, and setting committing formally let promotes Ziff scope initiative, Finally, to practices SBTI. you ESG

In governance a a do and is committed ISS December, addition compassionate to and citizens, beginning us both our and scores. levels. us has their to date, a to MSCI commitments, rerated being social deem AA, the the also late remarkable done their In to done, be in recognized. be of work a a and Davis, Davis and a engaged four up ranking area work being the carbon leader, of Ziff they zero quality incredibly of continue we of remain giving have our in to transformation, workforce we and in has ESG, which ESG. prioritization the top to Ziff of proud I score one continues given leader

the back me let Bret. Now, hand to call

Bret Richter

Vivek. you, Thank

financial our discuss results. Let's

GAAP XXXX. year both fiscal QX Our our adjusted earnings release and and results for reflects financial

our of BXB sale. our February during business to XXXX. XXXX, UK discussed related earnings we our XXXX date are in the our previous September As backup in results divestitures their calls, respective year financials sold these were reflected and GAAP sale of The in assets fiscal completed through voice

divestitures these QX impact presentation of fiscal our or not year do XXXX the GAAP However, results.

release these adjustments removal of, the XXXX Consensus. earnings of we Explanations for, reflects XXXX, are October provided the release. divested of businesses. Our On reconciliations spinoff Xth, adjustments these also the completed the of and for results in

year-end Consensus to our and exclude spinoff, from as contributions prior as GAAP from Our and for and QX reflects adjusted commentary We'll well the primarily results financial the continuing the prior Consensus to relate XXXX QX period discussion periods, income my today our to the XXXX discontinued to comparisons related our will divested operations, which fiscal focus statement businesses. the operations. business activity XXXX financial

the financial reflecting review on of XXXX, $XXX.X let's of compared summary period, revenue million Slide $XXX.X the year quarterly with X. We of a of as prior results revenue reported quarter decline for X.X%. of fourth Now, our million the for

for improvement was currency period, there for XXXX of the FX. X.X%. would year reflecting our which as quarter QX million year-over-year negatively values applied continuing of results, if in EBITDA when growth impacted million the during X.X% was have with $XXX.X declined FX would've Although growth by been rate, approximately for from foreign compared $XXX.X Adjusted some to were the value adjusted X.X%, the prior XXXX, XXXX fourth QX operations and currencies, QX the certain revenue comparable

Our figure adjusted with We was EBITDA fourth X.X% XX.X%. adjusted as margin a compared quarter results. quarter This adjusted QX reported increase XXXX for of our $X.XX. diluted reflects the EPS

Turning to Slide X.

EBITDA Adjusted grew divested revenue revenue for $X.XXX EBITDA excluding revenue, year of to billion X.X%. XX.X%. compared fiscal divested compared $XXX.X fiscal EBITDA, our XXXX, a as with the as X.X% For adjusted impact with of to XXXX businesses. million year-over-year FX, businesses, XXXX Adjusting total margin year adjusted and XXXX had grew we grew excluding X.X%

grew EPS the FX, specifically revenue, to year various diluted Despite diluted for economy, to adjusted $X.XX a marketplace. global adjusted we digital the headwinds, and X.X% businesses, was EBITDA, divested EPS. Overall, XXXX as able diluted media and Excluding adjusted report in compared challenging with were XXXX EPS. adjusted growth including

X provided for summaries have Slides On primary subscription. X, our sources we revenue, advertising of performance and two and

Slide as with impacted X% QX the As X, declined trends advertising compared compared advertising was markets. by XXXX prior XXXX, negative period. with declined XXXX, the again, this see in on can you as by X% and revenue foreign currency by revenue

Our net approximately trailing FX. advertising pressures and reflecting annual revenue the also XX-month XX% we XXXX, recent update advertising on was for that retention QX revenues, statistic digital quarterly, including

to figure in comparable quarterly Ziff the an advertiser revenue defined As of the XXXX had quarter, average QX slide, $XXX,XXX, per more fourth metric. in similar with than Davis advertisers, the a X,XXX

on revenue compared FX. subscription the subscription the performance in negatively impacted divested the customers total our was X% grew revenues for subscriptions, revenue reflecting revenues, XXXX flat, year's Subscription performance. XXXX VPN $XX.XX. media XX growth to subscription and eight includes by Slide with last offset subscription declined last months as essentially The our a primarily bottom depicts our of X% X quarters. subscribers. by last table with were QX revenue by excluding the quarterly Sequentially, during subscription as compared grew subscriber again Slide decline per businesses. metrics average X in X% Sequentially,

average per average characterized quarter subscriber the acquisition by raised of our As our the period. than number significantly LoseIt, prior these of other compared of a revenue acquisition, LoseIt of QX prior number quarterly of as the lower is at XXXX, businesses. significantly our call, average a our and subscription Overall, significant noted year has with our which lowered on revenue full subscribers reflect a metrics the subscribers recent since monthly inclusion of

rate renewed of in of factors, which including and basis November, points promotional increased churn to impact in increase This VPN from Humble XXXX XX overall by Our the churn. not X.XX%. QX Bundle value holiday sold bundles a number reflects were December, lower higher

Additionally, the X, XX% new of driven sales launched company's over just year-over-year QX $XX.X was other XXXX revenues Ekahau’s million, which by QX Sidekick to in grew XXXX.

from least while in included quarterly organic we've months impact revenue owned businesses in provides full relates periods. for total owned than growth for XX XX the X which revenue Slide and less the businesses businesses the rates, at of divested exclude relevant a XXXX revenue, months. acquired are to Revenues organic

As revenue X%, or a noted quarter in Fourth FX FX. earlier, revenue XXXX reflects decline organic total X% was for growth, again, part X% XXXX excluding adjusted divested businesses headwinds. reflecting minus

our please to X. sheet, refer to balance Turning Slide

sheet balance is Our strong.

investments. end cash more the than and million we million XXXX, $XXX QX $XXX of short of equivalents, As cash had and long-term of of and

on also a We significant capacity, have both leverage gross net leverage and basis.

include EBITDA, gross if financial investments. months value you the leverage our times adjusted times times, of and end and our XX only As leverage the XXXX, of was net was X.X trailing X.X two of

CCSI selling During to for million. we continued monetize Consensus, in of gross QX shares $X.X XX,XXX proceeds stake our XXXX,

held CCSI our shares, As XX, opportunistic we million with monetization XXXX, approximately will regards and of continue we to December efforts. X.X to be

a have As disposition to XXXX our reminder, October complete stake. CCSI of until we the

additional During XXXX, to approximately common shares. we did senior million and $XX quarter. par common shares not more of repurchase fourth deployed or our million X.XX% We capital senior the of value than during our notes $XXX repurchase notes

M&A balance on to other on capital that investments noted a allocation We continue As high prior alternatives. place strongly of value to positions health this us and the we calls, sheet. believe our pursue

remained M&A close continue activity. highly robust quarter, not acquisitions to and active fourth of a we While during pipeline did manage we any the

deployed M&A prior of we current XXXX, capital period and support $XXX in of activity. During million

Slides XX, our XX to Turning I'd guidance a provide to additional range. like and to few details relating

consumer calls, we the and interest advertising and remains the rates. have of navigate continues the the inflation weigh on macroeconomic challenging. continue operating our discussed As clients, this decisions prior to rising pressures to largest and call environment on purchasing current Global pressures of

higher revenue half. these were the our of the including declines in experienced compared first with of and its and second businesses other FX in Our XXXX, organic rates, in impacts XXXX change factors as the half

results, both XXXX could guidance as the second view our impact measured Our a carry XXXX to XXXX. of end stabilize of present in forward range XXXX and EPS, for revenue X%, adjusted approximately of reflects macroeconomy declines how guidance EBITDA the today. end and reflects of diluted adjusted rates X%, The the compared our half negative for reflects results unaudited and of low X% we respectively. X%, and growth as the X%, with approximately X% The high

advertising reflects of QX relatively XXXX. as in approach of in and expecting in decline other to income income details range, absence lower from in well higher in our as balances, and XXXX, stronger million that decline reflects reflects and the Our with a some of half. positive the digits, revenue, depreciation recent revenue XXXX, comparison assets, the other revenue It we economy also reflects growth interest with low the higher revenue underlying mid-single acquired higher of growth the our EBITDA low our QX compared in XXXX regards $X year-over-year. revenue the as our as each EPS This guidance, of in taxes, QX as guidance second With XXXX. assumption the XXXX. single-digit investments The a reported percentage reflects and of turn stabilization adjusted and cash expense, digits the well on results, growth end midpoint QX single-digit we interest part guidance slightly certain benefit to single low the subscription midpoint of as this also the

will impact second XX% the operating fourth and for that our quarter, company XX% seasonality to performance, anticipate roughly and revenues quarter approximately XX% range, our and At adjusted digital margin in our the midpoint of respectively. the of half the year. XXXX EBITDA of have of first our we an expects the be the Given of properties media

slightly quarterly. rate XX% have projected to XX%. rates We for fluctuate widened our to are of these Note, tax the between and an annual range rate expected

to our as share base slides anticipated related details count on and Additional the share well. comp outlined are

As with as expectations. we experienced our pressures quarter, initial throughout compared revenue XXXX noted last

However, adjusted managing Davis result, And growth on EPS costs. Ziff despite throughout focused delivered diluted XXXX, pressures. revenue as EBITDA adjusted and a we

as operating continue we uncertain we As expenses an will we managing on this navigate begin XXXX, focus environment.

our Following to that the supplemental GAAP flow. their This measures XX reconciliation reconciliation materials, cash non-GAAP on are slides includes nearest Slide business equivalent. outlook including for various statements our section reflects a free

XXXX cash cash our seasonally $XXX.X quarter stronger free to a flow Note, fourth quarter QX Our our reflects lower million. was also for collected and adjusted of highlighted free last a as rate is flow is taxes cash revenue as a significant This portion revenue also XXXX. to our typically but typically QX conversion EBITDA, use be on a year with call, the other quarter as compared was higher severance reflects in including capital, M&A atypical. uses, capital XXXX. working fourth cash fourth with compared With bit prior as working higher also quarter and this period, significantly and regards expected certain of expenses,

a the We to new system. are migration finalizing ERP financial

negatively in fourth this fourth XXXX. of vendor we quarter and the accelerated partner flow certain migration, payments This in part As the quarter. impacted cash of

timing complete, continue revenue, the We our certain fourth free and QX our potential believe to issues invoicing impact will in longer cash short-term also business. flow. cash seasonally slightly of our are receivables cycle XXXX, collections. that potentially anticipate we These delaying quarter strong that QX strong accounts earnings which to in importantly, Overall, customer take contains

percentage While M&A was adjusted non-GAAP flow to conversion expenditures, XXs, business high continue discreet target and to for ratio uses as certain cash. cash in than free mid XX%, we a the a our other XXXX payments, excluding core of cash of EBITDA rate our less

metrics continuing comparable as XXXX we key and performance, Finally, our despite free Consensus, number XXXX environment. result, our in as macro current financial to the both from having businesses, contributions flow Overall, is our a a operations. reflects reminder, growth proud are achieved of of our cash XXXX as as divested not a the well

rejoin operator With that, I instruct on you to how for queue would us now to ask the questions.

Operator

you. Thank

Shweta, instructions]. event a Khajuria slides today's is now from We'll the answer viewed As from first Shweta be for reminder, question question at Evercore session. and can live. conducting www.ziff.davis.com. your line And ISI. be [Operator is a coming

Shweta Khajuria

prepared of in taking remarks Vivek, for QX seeing my that thanks flattening you mentioned Okay, question. you were in decline. your

from comment mid-February you the far of October did you how kind and December, if of so what are seeing as trends perhaps this quarter as So, could through you what through quarter year. on the see - then through went

shoots. also seeing green on commented You some

question. do you So, are What mean decline, green of that's right shoots by then the now? seeing and flattening you what

Vivek Shah

for Thanks question, Shweta. the

slight which with QX, to I - as of respect the growth, the in least in offsetting think was with think had mentioned, pressures health some at really I particular out, business, QX we helpful So, I is we pointed RetailMeNot, in shopping I technology. And what we in QX. advertising release that take of place in typically as budgets in had also see significant pretty didn't some a

I am is than have view, think we business as we XXXX, where business. the health about Of in that's early. advertising the near-term really cautiously optimistic. more Now, a It

the where we is health is the It because in upfronts in of health category advance the relevant for XX% the booking called advertising us revenues. of are for So, we are have what programs year. remainder business, our

prepared to are So, on XX%, seeing single-digit on that remarks, the as mentioned respect we increases year-over-year bookings. with I

ad about growth, feel largest the vertical category. we the If modicum that. So, that's shopping of second its good also maintains

from us feel right depends pieces Obviously, the on climate, but things hit cautious are now, enter general on here stability XXXX. foundation for those So, the we we lot should that fact environment optimism operating that improve out. into we give in some have as and a and

Shweta Khajuria

And thoughts active, M&A mentioned environment? question, just I opportunities? you or any thanks, comments but Vivek. - the add please, overall timing one more on very are any You may on if Okay, the

Vivek Shah

deals, function at all and do a platforms, the I it how and corporate look, is it seven Yes, refer again, of we approach across our think, activity level of the we to really too. source do our we that to I

the opportunities. who of got inside you've eight So, organizations actively are all looking company at

we significant and but rotating So, year. a I see I do their great often market at fair what think our obviously we've you it specific we will And is we to new. believe the view, ensures a it now, this of That's a pipeline. a not We they us that also home be do That's can't our great point focus think lot sellers give see add prices. that this that creates they're at pretty right towards timing active always point, because lot. to look acquire and looking done, is businesses at I a but businesses. they view as have and that lot as balance sheet opportunities of

I businesses. And variety lot of attractive reasons, place so, a for an of think we're I think for a

Shweta Khajuria

Vivek. Thanks, Okay.

Operator

Susquehanna. next from live. coming you. The Thank Patil your line is from question Shyam of

Jared Pomerantz

topline is pacing for and Hey around the all through Shyam. potential the on color roll guys, we taking the you've this Jared Thanks that as the Thanks for provided year. for question.

there improve if line, a that the up year, on half second okay. bottom bit you you're And Maybe as about you're after pacing could how through to this growth the As OpEx thinking one you if expect this bit. a about got that's then us thinking is anything that, I’ve there? with might more pick share

Vivek Shah

Yes.

respect jump with say, - moment. let Bret I’ll in a in I’d here and So, just

suffered, expansion we experienced organic year. that XXXX, think consider points remarkable the we points close about you decline margin I with five or was in think five said, respect right, I I the think the as in when to margins, quite we to look,

a And so, is that view. very punitive point bottom line from often of

at prepared of investing the drive of really and business we during see optimized we them of a think organic because I think, that, next So, opportunities. we're in cost continue pressures, will said to the continue notwithstanding a few Having lot to line the statement CapEx level, were fact that into are level, around the I how growth great growth to we the is going listed bottom That revenue that all have, do a remarks. I the base. year. OpEx at we able

to So, do that. we're going continue to

So, think we're if - be it, in anything don't I EBITDA I margin in know, the going are add to of me, you'd we but pressured XX.X% guidance we Bret, overly to the about to not range. that? XX% say, to there's as

Bret Richter

Sure, just to being with think we're yes. thoughtful And I spend. regards our

action trafficked the year, points about operating through expense mostly on XXXX, uncovered regards at As We how in and our We attrition. did slowed spending. pressures savings to our of base, allowing through small talked but fund is of do fund we balance rather with degree each the What than we natural of the at the confidence opportunities them want year. those our we obviously to find pursuits, of hope. we businesses we end the pursue just take in marketplace, and various a had to employee with a

the advertising being those fund to spend case opportunities, have the in being subscriptions, there to the as marketplace dollars we're more receptive in case them. So, to growth, spending when thoughtful of to we about we but of see

Jared Pomerantz

potential In the search there. then the you. longer maybe a past, click And zero Thank Great. the and picture question. term towards shift we've broader discussed

the we might this all thinking your be guys developments, Given to how are able media digital of impacts about and point, generative type AI that at properties expect you on in recent particular? what

Vivek Shah

you're generative get they're we search AI answer I that Is engines, question? engines If will the specifically answer So, click-throughs? turns asking engines. into think if essentially

Jared Pomerantz

the part might broader expect from well. you of as and then that certainly That's just that impact a any question,

Vivek Shah

Yes.

that the underlying understand any I that whatever and or If content value need from think depending of on I point of algorithms property intellectual Microsoft refine I provide, view, don't engines it's look, value, I believe in underlying is value traffic expressed of in are So, search use will that's providers algorithms do every going that get who the to experience, and think a the like the use Google, think, they properties search highest the ours whether the best. traffic I they the flow, equation, answers, change. think to and operators,

call to view engines the search evolution as who engines want or providers the that content So, information answer you for high but query. provide really them, I for positive underlying or don't of being anything quality whatever

Jared Pomerantz

Great. Thank you.

Operator

the JPMorgan. And is you. Thank live. next Carpenter from from coming question Cory, Cory your line is

Cory Carpenter

of had you view but while, of spot for think how but Thank the first business ad then growth a Vivek, longer-term two. help just for thanks like? a of been been or in it's And for I And is, frame and big a just margins questions. changed bright Hey, the big do connectivity stepping kind at about its right the how has volatility looks level you hidden all? secondly, Maybe, what maybe your ton the you. you. has of There's segment. also business? kind profile here margin back, Could subscription within for this the market,

Vivek Shah

Thanks, Cory.

I we're know, continue as So, terms we growth to respect and ad profile, views solutions rates long-term performance-driven. to and be with in are the advertising market. I in, margin are the the my unchanged. continue provide, of bullish to I the think look, of categories you market, ad which bullish about be on then types

and of a a company, it of inorganic. growth inconsistent is rates took which we half kind we're on if view non-linear actually took we've talked XX% of business line with a a our looking multi-year total view, growth for not you'd as advertising think mixture I So, and roughly with and that and we that top for, the about bottom look half organic see

years. business business advertising the advertising I've growth unchanged. the and around in been our before. XX and this, swing. seen the almost coming around target through been these on that do views pendulums are So, now I've We've cycles for company rates

respect I unit, of addition am And will business to Bye. break connectivity, out the of as my I a we so, nothing terms Stephen but in changes that With with tell excited don't you incredibly it there. views obviously

on described his As the I a is known industries a respected, little is background established, sensational. and bit broadband call, He well within the and wireless telecom name and generally. very

more things announcement range growth that even broader it'll than can people us, was for so. and operate the lot It our average think a this margin, does with that that's inbound always continue a us, think industry lot that but of company of be businesses. very been I calls of connectivity got higher. and at a and a growth to attention of a the It the has understanding at higher rate to percentage I do an high in as engine

of it have a whatever then think and I I rule that'll options. it's something, of think think happens, I next to we'll high with is level, interesting is, a when a that continue. lot it And rule it's and So, to - Stephen, I the think get going

Cory Carpenter

you. Thank Great.

Operator

next The from is Ross Barclays. is coming Ross, live. your you. Thank from Sandler question line

Joey Petroline

Thanks for this Petroline on Hi, the question. Ross. is taking for Joey

So, categories can the a of then products question. for if Thanks the ChatGPT-type of I advertising to a question. could historically, about kind content XQ, Any this that squeeze Could XQ. AI again. on especially talk you lower Thanks are that's year? whether strong callouts category the second breakout you've seen in or business? during And follow-up of within in advertising performance or weak what generative how on editorial the cost

Vivek Shah

Sure.

say of think intelligence, I parts a it. use yields has intelligence outline we've though, of story. two best certainly it, in artificial for content? you and of I use that AI, to story what I of to to been are using respect the ways. it do editorial will look editing assist in generative at the How assignment of plus of with of the think generation, will of And to think, is believe So, quality it you AI. elements content technologies you a to and origination which story, creation story, to AI copy about role workflow, outcome. from lot that artificial think drafting idea, when editorial continue to that described, story, I One high there in human is workflow, to we

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Operator

Thank line you. Breen William Blair. is And the James, next your question live. is from coming James from

James Breen

the taking there? business businesses? where gaining the what little revenue question. per for couple seen a seeing coming Churn subscription several and up and bit Thanks. talk Can there of is a last Thanks bit, the we've over the but are little you're Obviously, losing down you different about quarterly across subs quarters. sub you

Vivek Shah

spot a on I connectivity, Yes. bright look, described, I be think us. continues our think, mean, we I the to upside subscription the Jim, in as business, for

largely our business. the is On principally, in VPN our been and has that's business, cybersecurity and been direct-to-consumer that downside

the outside acquiring principally payment North It's space. I the LTV The in VPN and that evade America. of of majority, start VPN - of is language about, from the us run One our we vast We is us. as CAC yet we North improved to currencies options As our America, America. in experience North in consumer a of foreign others customer buying think do prepared continues we've equation the mentioned challenging. - on actually space allow optimistic majority to contrast the outside I high-margin have view. probably taking inside business, including should our other find and not is to in described that market point am maybe business the I VPN remarks, past, acquisition foreign the and Most profitable thing of

So, have to didn't - have experience been those States. appeals haven't that because outside we geographically of we we a disadvantaged buying principally United the

So, can buying we're hopeful overall help experience. that that

We of CAC for that the I'll acquisition FX the it the segment. most company also part that MarTech also continue different headwinds, the point test of work had to has to to find LTV can equation try out, of us. and customer sources has within been a cybersecurity

Bret Richter

of per and different the trends, low within of the the average as a reminder revenue quarterly subscribers only per business Jim, And our a or wellness you thing a by the a of of sort And is an amalgamation revenue business that subscriber. a in if of we LoseIt the subscriber, added average volume I'd across middle on a basis. about number these of an characterized is and LoseIt, inorganic business the and just large and at health XXXX, comment that add, subscribers are look your businesses some company at subscription consolidation

in a QX I of that then in second quarters quarter change. and And those those brought about we believe month. for the QX, full in were So,

that the than other really quarter-over-quarter more on So, factor. impact changes did any have a significant

James Breen

Thanks. Great.

Operator

[Operator instructions]. the live. is Ygal, line question Ygal your coming next Citigroup. And from is Arounian from

Ygal Arounian

earnings back resources. growth, call guys market have Can Vivek, what with understood of at control, are a talked the little want heard can the rebound macro? and is as I well I to up setting maybe yourselves reallocation this of commentary. the led the go good things to of and doing point ad guys. within organic guess the off here through are And more focusing talk bit Hey, outside we morning, better that gone about of and to things to benefit we you on about you as a kind you're happening lot what and how organization you you

Vivek Shah

different know, no, different dynamics categories got again, great and categories. Yes, pockets it's And talk a the ad a it's as back it's and different you a not to question. and market we monolith. monolith, because do It's as about got look, go I’d

advertising all Given away and And there. that health of television, from pharma, it the that's targeted wellness, nature pharmas our of us. solutions embrace advertising worth where business the building pipeline, really for mass benefits of pharma market XX% really we're the focusing is believe the and we is print

the for the may business wellness shortage, And doctors actually there also ways health I'll labor nurses. is in and the you so, our of And and around category. for across you particularly we're healthcare that pharma focused board ad tell nurses. on solutions to as advertising industry, huge recruitment create know, part is a

example. great And systems then Health nurses help I think our have to our so, business, membership. seen I and is through our mentioned And we advertising healthcare platforms where ability is success and our really that. find with health eCareers in through solutions, business. another recruitment And That's shopping

code, super where are utilization to business, the there browser with as So, a cashback, the to on code will the platform, of membership continues and who which compensated compelling. amount of users the as has unit a that then to find app our extension, get to largely transact it's continue. economics had website amount coupon a come a historically, RetailMeNot, whether and significant significant or have But we it's the well

so, friction And investing removing member it and we and acquisition. simple, super in signup, the in investing making are improving product experience, in

what of just are better the can we those in doing position ad few where So, ourselves market. overall a think examples to I control we're

Ygal Arounian

and of it's go-to-market strategy and that's shifting Okay, org the improve to that's sales helpful. results us trends for there? starting Thanks. second, a to on the kind And and just over new how the cybersecurity if evolving update and you then can

Vivek Shah

really businesses sales email multi-year Thanks. of the lot we're signed largely We've called stride logo wins offering. that of BXB to Safe Send security for with our its actually. new has started where security business, hit a is a IPVanish in business, our got nice which cybersecurity part, BXB enterprise customers bunch significant the VPN just product of some deals significant I org a the QX, it's remind struggles. in BXC Yes, that part and the the no, everyone having in listen to the and want But

and So, Europe. We've distributors, in that. with both we're United some new partners the happy in States got and

email and phishing cybersecurity the mechanism would security I and the of email overall business, strongest. attacks. security is offerings, ransomware that are vector, email think and it's malware our the email attack Our - other I the for just our offerings primary delivery leading say And

in progress good So, there. get BXB, we'll claw think continuing BXC, I and through think and to

formula develop works on I interesting side, think some start cybersecurity. things that once for to we'll a we I the find will - think BXC

Ygal Arounian

Great. Thanks so much.

Operator

Rishi, Thank from you. The next live. is line question Rishi your RBC. is from coming Jaluria

Rishi Jaluria

one for just Vivek. even those my far wonderful. in a a for are taking Would on love businesses macro the the disappearing? into little XXXX, of terms Bret. at assumptions so But more to sort is you businesses? bit from business. can little IPVanish simplicity's keep more level are Oh, perspective. of much keep you it Hey, Thanks. you've just it cybersecurity drilling what making And MarTech I’ll business. churn from a which of far question. question, so BXB macro of what seen more of Hey, we Thanks hear bit sake, what a about and perspective out kind as seen so we modeling and kind And the maybe kind importantly, strip that think have to maybe

Vivek Shah

would very I churn questions. difficulty with in of BXB a any company while. sticky, the don't costs good The say they generally switching much solutions, all we significant. installed Once be for cybersecurity, of it. to no, installs right? our see Yes, that stay respect can and a It's

of I build business just that attach what better customer point more their can an so our to management targeted help email really of some our be the integrating see about we're there needing eye we're excited customers. Ziff we have basically email do marketing. into But of will going various initiatives, to a units don't they're there. data the Within insight to Mar’s databases our and there leads be with we across to email signals building is any getting MarTech, plugged more into customers where technologies that from larger are dynamics we and churn is not The so audience, a lists, have that platform it better So, SMB contact data and say ROI, their demographic. Davis to that failure campaigner that demographic view more because

things a different on going of there's both cybersecurity and So, lot in MarTech.

sort I think guidance we're fall talk Bret in XXXX. respect general thinking about may bit let and revenue how I'll maybe for - subscription to a revenue of where little about with think subscription just and we

Bret Richter

you that labor grow, then a into because some we see on QX, sort digits. of color I re-envisioned to we're end bringing gave noted the of of our single almost actual of been the fruits out get you we're mean, just the elements of of of beginnings if to we're with sort XXXX important the first as of strategy And and talking to beginning in Like customers, in Yes, on we into back some the Vivek those contributor quarter, quarter, of as second go-to-market that of will, BXB sort low leadership. growth now. And I with some widen fourth sort of revenue to timeline a upgrading track. we to subscription the as to we've in around products feed QX, end XXXX, mean, we XXXX, market. Street, of momentum. rebuilding the the on the lens, start at the enter somewhere it's our so go-to-market part bring about prepared reach I and our team looking to go And remarks. set. approach projecting We kind simultaneously the the it's go-to-market we quarter. think quarters beginning of several we're product for

acquisition, We're from base adding the revenue how BXB with revenue, of excited subscription the regards business. advertising. both are momentum ability and cyber but So, subscription connectivity. LoseIt our believe talked about look if about drag our to talked you expand about But a we also that MarTech. We've the we in standpoint, consumer some across we're there's within we've a seeing excited by about then privacy our there to

our market being full leadership a business the to yet. significant to that strong a has under it's in sensitive market haven't businesses, We activity, a there's digital subscription gaming excitement and had that a revenue very advertising Contributions digital subscription year a positive advertising the our our so of market, and for levered being think portion the business we in that's macro characteristic.

Rishi Jaluria

Thank so you Really great. guys. helpful. right, All much

Operator

is line question is Tanwanteng the next CJS Securities. Jon, And you. from your coming live. from Jon Thank

Jon Tanwanteng

one for for thanks guys, Hi in. you. Vivek, me squeezing

and the getting take if and of would closer most see but would perhaps more M&A need PUs to any vertical. get mentioned with be requirement What and it need you to bigger bandwidth and and of kind business additional a to deals returns right the now interesting to synergistic in on risk other of there. another scale in to running pipeline You

the that Just help us and of looking at understand what are kinds opportunities you're out there.

Vivek Shah

between or That's rent. seller. we in any to look, going would our it to a can in it's shopping. position with the be tools media. being it's it's That's where like purchase think be technology value what be gaming decision to where and best do, and it's in Yes, we I why health were theme like if platform, transaction. or like just value in overall decisions, aligned We We the of decisions. whether we and at lot buyer extract it's a in content high or We on inform likely providing in of

a that. obviously, don't of are categories And so, in which do there we lot

that's would And think think we in platform. about a so, I how

have believe portfolio. have have technology advantage. we're it adding we value that a unique the and that we models the to first be sort of leadership may that a we path It into a to can to deploy know-how, us, that something need be It of excess has we business. that of There that. function would function here to be of good to thing, to of is to but function to we a of can't in creation have an a have that we have business I that function that is a unfair the be think creating business value do create technology and needs just platform, we skill, is know-how just

Jon Tanwanteng

lot. a Thanks Great. Okay.

Operator

call no Thank to closing queue Bret at back in remarks. other the There Richter are time. you. now like for this any hand would I to questions

Bret Richter

Thank our you, year us everybody and earnings for QX today Paul. fiscal joining call and our We results. appreciate XXXX

recently We is great are coming you Our our Relations to have all website. participation and day. see there. details detailed upcoming and the an a on a out some hope in put conference continue weeks you We release Investor dialogue. our that, of and Thank the

Operator

Thank you. This conclude conference. does today's

You may Thank day. lines your time at wonderful and you for have your a this participation. disconnect

Ziff Davis (ZD) 16 Feb 232022 Q4 Earnings call transcript