Earnings call transcript Q1 2023

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Operator

Good day, ladies and gentlemen, and welcome to the Ziff Davis First Quarter 2023 Earnings Call. My name is Paul, and I will be the operator assisting you today. [Operator Instructions]

On this call will be Vivek Shah, CEO of Ziff Davis; and Bret Richter, Chief Financial Officer of Ziff Davis.

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

begin. may You

Bret Richter

and QX the XXXX. everyone, Conference Davis Call for welcome morning, Ziff to Investor Good

joined Executive As Richter, of I'm Chief operator Financial our the mentioned, Officer Ziff I Davis, Vivek Shah. Officer, am Bret by Chief and

which A expand on available available presentation the the website. you viewer call. our the there webcast, side, of launch this on A presentation the today's will is copy to is When for slides. allow is you on a right-hand button

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

the In addition, you'll webcast be from site. able to access this

After you conducting at be completing for a instruct regarding time operator the procedures will presentation, the that formal asking Q&A. we'll questions. The

addition, In e-mail can you questions to investor@ziffdavis.com.

remarks, harbor the prepared to we begin language. allow safe our read me Before

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

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

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

Vivek Shah

good Bret, and morning, everyone. you, Thank

see pleased second to While improvements advertising be the we're stronger about remains our to optimistic a half. incremental operating business environment, the have cautiously particularly in challenging, and reasons market

some by most exciting verticals, Of tech on is in Tech different an revenue environment. X pockets growth. While negatively the our vertical has outsized we're along having our of headwinds it current by the been, seeing with impact portfolio, affected far, tailwinds, our that is scattered

revenues Davis Ziff total have X% quarter tech, would the in excluding fact, grown over first year-over-year. In

experienced quarter shrunk Most vertical was X% for us to result, representing first the quarter. of in and a of and wellness revenue our exciting in connectivity revenues has Both the growth. the health only double-digit the businesses tech performance As total verticals.

Bay of the team. ground President you'll we Connectivity running Stephen and recruited As hit recall, division, to the with the he's be the

Ekahau, continue an data demand strong the growth. see Ookla for planning year-over-year optimize achieved operators networks. and optimization and WiFi significant services we to industry continue And leader across as within their to deploy industry XG in core

team XXXX businesses I mentioned some call, last to spend Group green consumer visitors. unique reach an strong we our appears ad pre-pandemic cadence March, digital its our seeing predictable And by returned both have In with ad first in shoots more were Everyday My where Comscore's #X, that category and buttressed unduplicated professional launch drug a in the pharma pharma to the health Health of XX.X time U.S. in our and and hearty calendar. was, in grew for for as history, comp given million we Shopping that congratulations but AAA in to while third retail the Health. which not Offers.com slide. Everyday the to quarter, releases in at but titles. very first advertising declined year's down last game view The the quarter, of the Stone may quarter important, was due of to release continued row, a was QX humble gaming the timing game vertical Dan tough a in primarily very

our a a quarter in this digits to represent in over and by offset e-mail down We're we've asset the resources year-over-year our SMTP stabilize and believe that adds we pipeline technical robust each improvement high being reallocated the subsequent what I e-mail from solutions. customer can slight usage set growth call, an and in incremental for for and believe and growth to strong quarter-on-quarter last. VPN Cybersecurity a represents said and we This last address solutions and VPN. offers in will first of quarter, revenue with Campaigner encouraged new the single the on improvement largely martech in year As business challenges grow. declines is by QX, were return

the which In expect we year-over-year favorable we a throughout drag addition, currently impact QX. a from was year, more progress as in FX,

to deploy On the sourcing to nearly uniquely continue our of where we M&A great commitment capacity on balance a and to program $XXX have active our a value. to investments opportunities patient arise, But we be we When capital cash the that will decisively. rotation highest deal are result increasingly balance we selective in With ability act in year. the of balance midst attractive pursuing right of only sheet, million opportunities opportunities acquisitions. will front, is to positioned of that over with for a confidence in continue a unlock market and to to we continue the we this have the the believe

that aware our than very pace has recent are We activity we expected. been of acquisition slower

rewarded, We're by or shareholders' be businesses. well. for we're as assets our invest our decisions our examining divesting and making believe and where we our always partners However, the to where enhance of about grateful patience potential will monetize to ultimately portfolio seeking to patients and growth

with tech our exercise rationalization we an an quality be It's sharper hired Portfolio as is publishing to focus pick tech such the discussion discussions we're addition, an run I successful is our our This and leaders newest enterprise. from new not nature for for remain us. that AI. to call for we advisor divested last clear, we've resulted first processes on context explore company. the healthy important BXB exciting we had years, wanted any options and business chapter recent Mashable business, several and this in up the pleased intend have to of with to some And and that having. about of In for us we're in strategic a the and brands discipline for PCMag, in BXC the a

including company. new. excited We've create by We're potential But AI the AI streamline Ekahau. many of and over understand compliance I our powers so. also AI a to algorithms our for has our technologies very our topic power AI and not supports investor utilizing and data opportunities business is in rightly security high customer solutions that's across been our Machine to Moz interest enhance Ookla products, the platform. processes. connectivity our that and and at learning decade. compelling proprietary

What are categories models, AI is new the X in opportunities. identified advancements and language key large generative exciting We've LLMs. of

of The data first the analytics proposition deliver to proprietary enhancing value insights. and is predictive our

creating about production experiences our content process. new about our consumer-facing content the brands. efficiencies third The our across second in is and gaining increasing is And conversational velocity

valuable front, possess and On significant the a data. we of data permissioned quantum proprietary,

connectivity over from X billion throughput installs XXX over million tests across app year. global than a in every insights leader are countries with XXX We more

billion over with unique We are leader in a XXX million and annual e-commerce over and [impressions] shopping category visitors. data X

Our trillion over results is of search indexed XXX and most authorities Moz brand pages. X.XX engine one XX billion suggestion keyword million online search the trusted links, with in analyzed

directly customers' more By for unique and proprietary predictive value them. harnessing create our data, support enable that our we objectives can insights

We deepen audience excited For audience our that can have leverage our two-way engagement soon generative virtual connectivity to are with also way. our interactions Until been now, engagement. through create assistance we AI on audiences. predictive to experiences churn. example, data AI-powered We're new can has primarily conversational one customers to with that leveraging support can likely about providers insights

nutritionist instantly app we resulting offer their on based This us in greater can For engagement. audience that our to personalized It! unique Lose in a app, addresses our represents audiences queries opportunity inputs. better objectives, support example, a our for virtual their and

effectiveness and all improve efficiency across have to Lastly, the opportunities rapidly. increased our businesses of

editorial up of integration enormous our the steps our organization multiple various creation pursuing itself bottoms in more see AI content. example, This of to For editorial come are editorial as the has creators editorial to generative high-quality about workflow continued the actively while the enhance ensuring teams content. productivity an opportunity produce from across trusted

The includes Bret, I separately, with report inventory both This let our hand we decrease emissions back SBTi, a and that to targets greenhouse Davis' website. right our ESG gas ESG efforts. from this DEI released X, Ziff be progress from XXXX and provide found can we the illustrates our I'm the you report, happen X Ziff Before ESG represent pleased XXXX emission on and our recent on our of the and XXXX. findings of year-over-year on me In scheduled await Scope X% validation path as later update report solid that Davis' are April, report, XXXX an to most is which reduction from we to X combined science-based call month.

to increased practices. Davis. communities promoted details increased also of implement extensive in the of change to color efforts corporate hired report leveraged data increase Needless on work in and company security provides our an and demographics some continues review hope are Ziff latest done a workplace people managers take report reports. prior in compared as programs, and and which the to of The discusses to update both help how I'm and who XXXX, year. percentage Davis representation and to Davis time you'll the DEI report Of actions and thrive. can Ziff note, of The our are I Ziff women, foster platforms incredibly and privacy, our our policies governance all across to the the are includes we ongoing percentage The also we've say, the has to taking proud and do we promoted

me With the back Bret. to that, hand let call

Bret Richter

Vivek. you, Thank

results. financial our discuss Let's

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

will our to adjusted and will We discussion our relate focus our QX to XXXX financial prior my periods. commentary results today primarily comparisons and

the Slide financial review summary let's of on results quarterly Now our X.

values if quarter reported for decline a $XXX.X We impacted first year XXXX compared and X.X%. QX as compared of comparable year-over-year with results, EBITDA the rate $XXX.X XXXX QX declined XXXX period, prior approximately the Adjusted million million for $XX.X X.X%. as to million revenue a prior year for decline of would X.X%. reflecting currency have of period, FX by for the negatively growth of the XXXX were of with revenue the reflecting $XXX.X QX applied was revenue million our

adjusted quarter the $X.XX. We reported XX.X%. margin diluted quarter was Our for adjusted of EPS fourth EBITDA

a expectations, consistent some saw While QX performance our of with XXXX we was in businesses. overall between spread wide our

As performance year-over-year disproportionately particular, BXB had results. and business our negative our on noted, reflect and Vivek therefore, technology impact a our in business to market pressures continues

connectivity and also our certain businesses. and several of noted While health wellness primarily declined earlier, growth, our year-over-year, exhibited other year-over-year as businesses Vivek

Davis year-over-year. QX Excluding Ziff X% XXXX grew more revenue tech, than

our of X revenue, tech. heavily QX XXXX. was as challenges revenue consistent performance provided X This performance. Slide X, declined prior with impacted performance sources the also On Slides XXXX within advertising revenue company's the the primary X% QX subscription. we presents with and compared summaries have and by for advertising X year period, advertising by

by impacted the vertical, revenue have in the rates declined decline technology with year-over-year X%. our period. foreign was advertising currency would reduction advertising compared year Excluding XX-month prior Trailing by also as X%. This been

Our update revenue net annual decline the with QX and XXXX, we advertising for revenue. quarterly, retention was consistent in XX% advertising XX-month that statistic trailing largely approximately

the a fewer customers per defined of average with advertisers with quarter, more revenue As nearly slide, customer This than year $XX,XXX. quarterly reflects as average the X,XXX in the in had Ziff first per period. Davis compared advertiser the revenue prior at higher

compared essentially contribution performance. in our XXXX. bottom X year revenue by were from growth XXXX revenue months, as the that by was flat businesses XX prior last with quarters. Sequentially, declines the and subscription gaming Slide last during X in period The excluding Slide subscription divested were the metrics for revenues subscription includes privacy. subscriptions, the the primarily grew QX offset negatively impacted slight FX. Subscription in reflecting X% and depicts It! total certain subscription Lose grew again X X.X% of on customers table

by to Sequentially, our average revenue grew subscriber X.X% $XX.XX. quarterly per

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

martech basis rate QX X.XX%. and improved improvements number from XX reflects decline in churn. including points to overall Bundle This connectivity, a of churn factors, Our XXXX Humble

the other declined company's year-over-year. XXXX QX X% revenues Additionally,

businesses the months. from owned full XX revenue provides quarters. months and XX rates for X at Slide to less revenue, a we've for for X in organic while growth included total quarterly are Revenues organic businesses least owned acquired relates revenue last than

earlier. the QX FX business quarter X%, performance discussed decline unit minus compared improvement reflects organic First revenue XXXX trends a declined small as X% XXXX. with primarily This and adjusted was for

sheet. balance our Please to refer to Turning Slide X.

Our continues be to balance strong. sheet

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

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

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

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

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

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

more closing been transactions balance We strong quarter, that pursue challenging to allocation capital to anticipated. X acquisition the capital other we for and multiple business opportunities. our positioned of environment that well We M&A strategy. is than current believe sheet in and we Our continue first the continue has foundation are M&A alternatives. to acknowledge in We allocation closed pursue investments our media the

However, financially even are we and well regard stock intend positioned our and upon and the M&A second do quarter, we continue market to above in so current to operationally at stock's strategy. repurchases, to repurchasing to price. we continue shares the With to believe execute aggressive both that we began

XX. Slide to Turning

reaffirming XXXX. the XXXX year fiscal guidance that February we in range are We presented

rates As our adjusted and a reminder, and reflects adjusted EBITDA EPS X%, guidance the XXXX compared XXXX of for negative results. with adjusted growth high as our end X% financial X% diluted of approximately revenue,

approximately The and low of X% end declines X%, reflects X%, respectively.

call, weigh year-end rates. interest the macroeconomic challenging. consumers advertising enterprise of environment high continue purchasing our the clients and of our on on remains Global decisions to discussed rising the we technology continue largest earnings pressures particular, in navigate our clients As XXXX and operating inflation pressures and to

reflect adjusted results factors rates. the Our impact certain other FX of change QX as these as XXXX in the and well

our and macro carryforward XXXX As call, results half of reflects our XXXX. will an the impact second that of our expectation February we stabilize the noted on XXXX the economy guidance during

performance of our during our a largely As was few with consistent whole, XXXX months the expectations. first

half. As we second to continue to the of balance stronger XXXX, a expect

half the revenue in XX% a revenue phasing second realize expected This revenue Assuming total year-over-year this approximately we XXXX decline expectation, second XXXX. half XXXX implies with would revenues growth revenues. of reflect QX of

our with to be expect slightly stronger in be levels. to we environment, EBITDA second holds we the the investments plan, In our have We adjusted guidance. difficult QX QX our QX to and a the permitted our and adjusted resulting believe EBITDA would were business, in the that would our anticipate adjusting XXXX Notwithstanding have continued therefore, promise half initiatives we strong margins and, transaction overall guidance. we margins anticipate consummate BXB hiring involving implied our into event or above margins by consistent we near

cash quarter that Slide This our various was conversion. a including flow our reconciliation a on to QX that EBITDA. XX will the are free QX, flow. occurring Following interest supplemental million, QX reconciliation slides free of cash business materials, strong our XXXX the to outlook QX for outstanding flow. GAAP similar reflects statements non-GAAP nearest cash year equivalent. impact our reflects lower flow Note includes the XXXX measures cash payments a section level prior debt despite amount free which on free semiannual $XX.X cash and QX

period. tax prior In compared make addition, as significantly in QX payments higher year XXXX plan with cash the to we

while shareholder pursuing alternatives XXXX to for to we pursuing allocation results QX enhance XXXX our businesses alternatives value. continue believe of we pursue selectively that believe Overall, position our our capital plan, us will certain strategic and

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

Operator

is first Ross [Operator coming from from Sandler Instructions] the Barclays. today question And

Unidentified Analyst

on Ross. Joey for is This

linearity far provide in business. on then saw the this for verticals advertising the can callouts you that XQ, the any color so Vivek any So meaningful quarter? commentary on in the XQ additional there. And appreciate different you I

Vivek Shah

Yes. category. great unpacking No, advertising I by and think a worth about it's question. when we listen, trends, is think the it business And

ad category, largest with is wellness. start and you health So our which

So in a strong quarter QX.

given talked cadence category think, in optimistic our I that which and are XX% roughly represents I as drug remember, call, marketplace the and this And I I business. well seeing upfronts, about, of XX% think about as pipeline said, to the is health last pharma, in in advertising where the we're the wellness As the we general.

an to -- important So that's it's one on. focus

it category not largest quarters me And for next growth. consecutive is tell to That's X be shopping. see. should The that lost we not of with year-over-year important us

execution the the it generally also think e-commerce RetailMeNot, of reflects I marketplace. both but

what's about in retail. good feel we So happening

is is and by Gaming choppy, that the calendar. driven

in And be just last a so games. comps year's end year, slate tough, of saw QX given the AAA I feel of we significant think place, we'll were QX like good by a but the that the

tech BXB Check cycle and And my has seen a it's category, a been challenging. I on and in good tough cycle. the And back, think as back. it places. we're career a then I've comes side. we'll in We've BXC, it had when issue. Tech, BXC seen comes particularly in And other very a in position, be both been before. the it

So it's the about balance generally feel of about I they the year. talk markets we markets represent within the ad I we're what for think, when the market, the we market, optimistic in, look, think and

Operator

Arounian The is Citigroup. from from next coming question Ygal

Unidentified Analyst

about you on capital Ygal I Arounian. You have how talk for could guys about allocation. guess you're [Max] just thinking

that process? is -- inning the what And of tech in just can give and rough more you and of maybe should rest current You that kind are kind we about just the talked of M&A on the we're and impactful maybe that M&A opportunities. on just how of also us markets up maybe environment? then like what business, buybacks the of stepping you trending But about some year? how private BXB think give color scope can How a kind for

Vivek Shah

sure. Yes,

M&A Bret maybe buybacks share about start the business. and BXB and with Let I'll then to me tech ask talk

currently XXXX. year XXXX to a isn't on look, this So And just pace statement is the M&A about lowest we're seeing. be since what

it's The particularly lower think is quiet. market the marketplace. specialize really where which and we I middle focus is

program is our acquisition the commitment unwavering. So that But is backdrop. to our

We have that. acquire, X great vertical capacity on new to add to platforms which to the have a we

but buyers focused time, pretty marketplace. this a robust So fundamental between very much we same are gap pipeline, there the a and in sellers on is at

discipline us any and would believe taking do of we so but our longer And hallmarks witnessing rotation, approach. is a Patience always it of like. been we're than have

at time. And short everyone we So I in of has periods look sort lumpy. always been might M&A things of these remind that don't

So if X you in in $XXX we deployed years, million XXXX acquisition and deployed program. go those XXXX, back to XXXX, XXXX about $XXX million. and Then against we our

I back. is pendulum the think slowly swinging

look a this So I time, if you'll start see think, you before. of window we've at to longer this that historically seen over, think I

look, so position. buyer, think we're I And also a as in privileged a

day. got and You've that tightening every tightens credit, just

for think deals of lot is market using a performance. buyers I and unappealing stock given

significant with a balance Bret? of have other sheet, advantage over So an sitting out. as buyers rotation buyer a cash as I our itself plays do think amount this we on

Bret Richter

Sure.

the about, markets regards the have. talked capital . balance make is operating which as the a we're allocation, with then, we're then expectations, So to over at to this sheet, with in business process that fortunate we've the our and a very course, of constant of generation healthy environments in, time, decisions. flow dynamic And business look the we're cash within starts

allocating our pecking important opportunity regards acquiring up meaningful we're shareholder level the of stock a to shares the an and component allocation But believe by to a when buybacks moves value we we trading buyback. always creates order, capital at strategy. us is capital made that an capture With for comments stock in are that the currently stock to today,

balance meaningful fund trading importantly, But we M&A believe dynamics. to shares, stock program sort our is intrinsic what these that of value over repurchase and potential. believe We That we sheet do can given represents discount maintain and our a current upside the time. we healthy can our

but equation my this decisions very we're and uses back our going comfortable time. dynamic confident manage. competition we're making capital to a we that is course, of healthy a always at statement, the Of and first with this There's constant for

at to asset this our part how evaluating conditions, fit Similarly, they looking to And it each time, is stages hole. by internal business like time. of certainty. how Spiceworks, explore our specific in of strategically specific our general allocation also factors, in conditions over It's alternatives. strategy. the the numerous exploration. involve we're and businesses encouraged The valuations constantly a And a No outcome is We're certain market external of and our a circumstances, sort of factors, at point and points business, in our facts fits determined given in portfolio factors, capital in case enterprise the early. tech initial strategic we've

Vivek what as and This but past time. portfolio right approach, a with consistent Ziff development, Spiceworks we mentioned, review is to and in of as own in Davis. happens business entirely scale at practice we'll meaningful over its and look portfolio terms both see relative

to dynamics I about on it's potentially enough $XX-plus with $XX potentially also enough both market large which revenue, similar time. business that is million The million, the path in $XX might can go as at this the think business we its either in small own what's fit million, be to marketplace, of a down. produce is depending businesses interesting attractive but opportunity

the participants think partly our I the to months, market exhibiting and handful about, spoken path what weeks, handful of we've we've of determine in will play business. seen out is how next other by quarter-plus marketplace, Obviously, that that

Operator

coming Shweta Khajuria ISI. The next is question from Evercore from

Shweta Khajuria

creation nicely and company LLMs, content. the I -- you the leveraging benefit and to long and of guess -- term. out AI plan for laid access how get the generative you that on it one pushbacks you're to for the is on how the to do we Vivek, content of

wellness would down, platforms say whereby with easier to cooking much a engagement is go website. -- health what could been or to access made who that it has content thinks website certain on someone ChatGPT, and you whether content a so So

quarter Bret, the about and cadence the that but got repeat could revenue for the balance -- do that? I'm So of And sorry, then, want and we you the how second EBITDA. year just should make for how you to I we of please sure think think right.

Vivek Shah

Thanks, Shweta.

to that you're user-generated threat say, I content. certainly I've barrier with And that around remember the long of the the the So hypothesis even right. develop. of sort And content, look, -- heard I content I which the kind of brand same entry ultimately barrier starting of trust, produced it, lowers think removed was duration, the generative is think content differentiation that I There's and the monetization forgetting of who's the matter. sort all the I points of producing AI to thesis how And being explosion does to distribution, think, and and kind value content around that it. has the

to So that in us content don't that And there's of in today. intelligence that the marrying human and only stronger. change the real any there's artificial also I world going a I think fact think be do meaningful lot makes

more, that I by to ability produce produce it the incredibly quite fundamentally, can we opposite, content think look velocity I which exciting. the that our at is

technology, our that reasons probably in believe new out can any and early right? reasons what But law, business. when I the Mosaic the we laid long and in technology and haven't through You I that the short even recognize with do. thought great this as meaningful think cases, use We XXXXs, the term. for that for right? for other understand as is the saw the effect this in this technology of it's old the impact underestimate that is I first the term We overestimate I

data competitive unique, I -- about different acquiring think that we've of have maybe believe the by is you data very been we systematically data create a actually a do And have category really a in puts in put other part I "content" and that And past, that we've I a companies. is said that things that us exhaust of sets, that data And think businesses data about talked proprietary can advantage, systematic. lot if lot. than

and this all but lot and I'm It inside we're and company is AI. of mindful dynamics. different a excitement So energy of initiatives bullish of there's a early obviously number experiments of the around days,

Bret Richter

and is bit the over answering But to thanks should little the that we're XX-day comments question running a of them over the with repeat for set expectations We more. a We XXXX Shweta, that cadence the long to expectations question for but in of important And the not we're plan balance mind. in for regards an it the course period. only further unpack the in just made today. it's sprints. business running year. I say, asking on did in Happy XX-month with question, think the overall I not company term, a for February, of maybe that

But contracts in on end significant a we've quarter course a call discussed like unique such The on impact impact have dependent also their just connectivity dynamics this a flow their many can over seasonality. have have and XX-month a that has market end in Vivek just before often that are the but of business meaningful that quarter very and dollars little worth or it's our businesses XX-month signed after mentioning quarter. characteristics period, highlighted the releases very is businesses our so that specific over period of factors, calendar game

That balanced for the confirming said had completed quarter and mean, second year, we was first think the just first will it our guidance half. said, we I half be what a and

Second overall embedded but It's we what how XX% guidance. our our depending achieved perform, expectation. on that's in half, of we annual and revenue approximately

because expectation initiatives We and the are as partly and investing also the in of but half in performance, will year the back we second the of revenue, result beyond. see we the EBITDA a result of in revenue the of margins believe will cadence that mix of quarter, lower in growth

of we're businesses. certain hiring money, spending So our some particularly in in

margins. we the through the margins run will above balance on impact move continue we be year. an quarter or And of have first will dynamically to businesses that have and said course, So I quarter is what to margins. second the near And of slightly believe

Operator

is next from coming The from RBC. question Rishi Jaluria

Rishi Jaluria

secular and As use or acquisitions asset? bringing faced know that between just divest we looking of how leadership behind business. versus and you maybe kind that made certain trying But us execution? the of that process BXB understand you weigh remind that think of recently more to and decision and what And I turn points. tech about the potential drives decision ultimately thought maybe around the sense. the layering you time is those more business of investing and point have the them challenges, the on deciding process maybe BXB us and best at thought your divesting new businesses Can X be help backup divestment did the

Bret Richter

ours, too It's both Thanks that for a to the ahead to it's to our less only we of capital we almost businesses business. be you do capital want about human specific they a that I an question, others, compete on not allocation. effectively. where energies, based compete necessarily points but to count. sort of are business also and to but which factors we as in invest there don't holistic talk the invest energies is element where many think want allocation enough alluded dollars, Rishi. like I is review But mean time, may in And pull for those our and at which

financial inorganically looking out resources, our in our for human against on our opportunity, triggers. external expand at there triggered factors, M&A. analyze assets because are sometimes Explorations essentially, competition businesses just we're regular And manifested through that in exploration. sometimes analyze opportunities portfolio for an a all resources even to yet basis internal competition haven't multiple business is constantly by analyze and our fit and initiatives, we of look This

of encouraged is allocation an early outcome promises we in time as by an as else our but So review here. do. the again, no We're initial an We're exploration. important element anything portfolio energies, management's to

Vivek Shah

just is that think of capital would Rishi, competition is that I the Bret the underscore internal for real. one and resources things, said I And

to against at inside terms and And look of have like the company we what take so of pipelines, looks those looking they're other businesses. needs to growth for their their often, assets businesses asset profile where capital, an the in the for their

incident, right? much is That And not our capital know. we

that right? what in against we is would think And the the it the do. about in and against se, as we as years predetermine ago transparent in And BXB the value per healthy. extract of that thinking in always the thing be I on I this then believe positives think So us you other do it pointed is process we're to the the out, is value we're regularly. if we're but of And the to business and process this was for the we're continue think so focus stage, going ran And And backdrop, evaluation the value, financial assessment. we of might know, want I that right that's be terms to you we we couple look, transaction that not outcome we running. run what do a backup to part

Operator

The next Shyam from Patil question is from coming SIG.

Jared Pomerantz

after And dig further to on seeing might the of similar was Or is in we particularly half more marketing, bottom in bit that progresses? digging Are see half in between that a in dynamic thinking there of hoping year. we maybe year were weighting sales a and there? pace thinking on you terms see line line in how back about the [S&M] for and increased out year, back some efficiency Shyam. then increased efficiency? and the largely as maybe This the fourth Jared of year-over-year. Anything last third quarter I on you're the you'd margins in of could quarter call

Bret Richter

details generated Again, costs, businesses our margins. our everything a of a is this in businesses internal. as business certain the of certain internally each challenging. line dynamic item with as is of have little different mix businesses content our Unpacking of have have have external which business businesses of Certain our of the sort partners,

message half the I back the that to of important again performance think year. the in strengthen our expect we is

our across see signs virtually and businesses. to several in it all our that of those connectivity. expect and health seeing a of We're today, them highlighted number businesses, of We we've particularly --

amortization. some Obviously, balance fourth unpacked cadence get our the call are we our at year-over-year play, and more we regards our to sheet to changing, of income. we're interest is line, comparisons bottom on dynamics different that As and depreciation quarter earning including on with

declined has year-over-year. interest net our So expense

Our the up early stable, tick fairly tax a this although rates been year. part have in of

part foreign part to relates that mix the rates. that in tax of of And changes of and relates revenue, to

looking of our every a a period important at mix I bit unpack little line of and item. it's to the And over look when expectations above. rather overall think specifically to and a I business all stay whole our as a than and at XX-month over businesses each guidance try again

Operator

question next The is coming Carpenter from from JPMorgan. Cory

Daniel Pfeiffer

This Pfeiffer quick for on is Danny ones. Cory just Carpenter. I X have

maybe already generative see to any It! conversational for And that in used success about brands know any onto then new component the your an Can Lose you talk on being advertising experiences, there? you've in other So steps besides Lose with? implementation are could there portfolio I or this you've get you experimented taken It!.

Vivek Shah

question. Yes. Great

So be Lose its I subscription It!, to a continues grower. mean strong business core

advertising year just calculation been And we show it through of want later, ownership XXX%. at so out. statement. revenue into It that to haven't flows little just I yet point has doesn't lapped So will the growth come bit and organic incremental then that make because up X to a our something

the proprietary data and imagine and to IGN, pregnancy. what a I the each chatbot our health really and game we -- how dialogue back respect so our content that and in RetailMeNot, can a forth coach experiences. parts say a you game on assistant brand, very have an trained within nutrition would concept Lose and which important I end a at are within With of would guides, have within editorial incorporate project parenting these, illustrated you of can It!, experience set and X-way say the our creating you of buying and you within conversational

there's brand. almost something really, every for I So think

we're extract look, engagement that. excited we can engagement for think and ultimately all ad And of rents. I it And -- so drives

Operator

Tanwanteng Securities. question from from is The next coming Jon CJS

Peter Lukas

Extremely Been helpful, extremely it's questions. questions Jon. Lukas -- of sorry, for most my Peter answered answered my of most and helpful

us Just color wanted the M&A and is lot on you there. a how of to outlook know, gave

looking you're in approximate is kind for of size deals of Just where the you that focus and what guys at wondering on you're terms of the seeing in pipeline? the

Vivek Shah

look, we're health, tech the gaming, cybersecurity, tech, anything the -- all running than side, given of else but across it's martech. on Yes. process shopping, connectivity, No, BXB BXC the we're verticals, looking more

one think deals. for operating of looking our units I every are

we're the monetization our we're verticals that verticals new at think similar, we can an where and audience looking to are see that at level, are the apply corporate we then complementary knowledge in, them. playbooks we And where platforms to

that deals middle So say right, sweet our has of under size generally always and it's across lower as I this would value. I enterprise view, spot, of board. in $XXX the from of I are said been the think that so market earlier, kind a point million

that, said billion have those deal closer Health were to we couple Having ago, RetailMeNot years $X.X flexed of Everyday the deal, a up, the deal.

capital We I think feed of that's neighborhood There our run. mouths to to the a are we still inside in like which the So lot company. of around. spread

many our in builds, is -- got into So view into, and But as the duped to capacity, doesn't bigger balance feed general of bigger. various think inclination we've generally, the oh, don't I as afraid company. our it not We let's of change all deal. a managers our sweet necessarily sheet I platforms this think the don't spot. get go our We're

Operator

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

Bret Richter

everyone, thank earnings XXXX for our you, call. Thank us and joining you, QX Paul, today for

conference our schedules upcoming on participation Our website. detailed

activity some the you of to next some there. plan see weeks, handful hope have for of We and we

Operator

does This today's Thank conclude you. conference.

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

Ziff Davis (ZD) 10 May 232023 Q1 Earnings call transcript