Q1 2025 Ziff Davis Inc Earnings Call
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Speaker Change: Good day ladies and gentlemen and welcome to the Ziff Davis first quarter 2025 earnings conference call.
Paul: My name is Paul and I will be the operator assisting you today. At this time, all participants are in a listening mode. A question and an intercession will follow the formal presentation. If anyone should acquire operator assistance during the conference, please press star zero on your telephone keypad.
Speaker Change: On this call will be Vivek Shah, CEO of Ziff Davis, and Bret Richter, Chief Financial Officer of Ziff Davis.
Speaker Change: I will now return the call over to Bret Richter, Chief Financial Officer of Ziff Davis.
Speaker Change: Thank you, you may begin. Thank you, good morning everyone and welcome to the Ziff Davis Investor Conference call for Q1 2025.
Speaker Change: As the operator mentioned, I am Bret Richter, Chief Financial Officer of Ziff Davis, and I am joined by our Chief Executive Officer of Vivek Shah.
Speaker Change: A presentation is available for today's call. A copy of this presentation is available on our website.
Speaker Change: When you launch the webcast, there is a button on the viewer on the right hand side, which will allow you to expand the slides.
Speaker Change: After completing the formal presentation, we'll be conducting a Q&A. The operator will instruct you at that time regarding the procedures for asking questions. In addition, you can email questions to investorsifdavis.com.
Speaker Change: Before we begin our prepared remarks, allow me to read the Safe Harbor language.
Speaker Change: As you know, this call and the webcast will include forward-looking statements. Such statements may involve risks and uncertainties that would cause actual results to differ materially from the anticipated results.
Speaker Change: Some of those risks and uncertainties include, but are not limited to, the risk factors that we have disclosed in our SEC pylings.
Speaker Change: Including our 10K filings, recent 10K filings, various proxy statements in 8K filings, as well as additional risk factors that we have included as part of the slideshow for the webcast.
Speaker Change: We refer you to discussions in those documents regarding safe harbor language as well as forward looking statements.
Speaker Change: In addition, following our business outlook slides are our supplemental materials, including reconciliation statements for non-GAAP measures to the nearest GAP equivalent. Now, let me turn the call over to Vivek for his remarks.
Thank you, Bret, and good morning everyone.
Vivek Shah: We're pleased with our first quarter results with revenues and adjusted EBITDA, both ahead of our internal estimates.
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We also believe that Q2 will show accelerating growth.
Vivek Shah: And we are reaffirming our full-year guidance, which is a reminder reflects revenue growth of 5% and adjusted even a growth of 6% at the midpoint.
Vivek Shah: We continue to be an active buyer of our shares, and we're settling into a nice M&A cadence with two acquisitions in Q1, one in early Q2, and another signed last week.
Vivek Shah: Four of our five reportable segments grew in revenues in Q1.
Grue, Over 9%
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Vivek Shah: The fifth segment, Cybersecurity and Marktech declined nearly 11%, however much of that decline relates to certain timing benefits that occurred in the first quarter of 2024.
Speaker Change: I'd like to share some thoughts about each of our five segments.
Speaker Change: Starting with Tekken Shopping, revenues grew nearly 18% through the combination of organic growth and M&A, and adjusted EBITDA grew nearly 44%
Speaker Change: Her bottom line growth reflects the margin expansion we had planned for CNET.
as well as the shift in our strategy for B to B.
Speaker Change: CES was a great success this past January , where we unveiled our new tech media portfolio branding, CNET Group, Declients and agencies at the event.
Speaker Change: We also partnered with the CTA, the organizers of CES to launch the official Best of CES awards, reinforcing our category leadership.
Speaker Change: Gaming entertainment revenues grew by nearly 4% with 7% growth in ad revenue while subscription revenues were slightly down.
Speaker Change: Our humble platform had a weaker lineup of game offerings during the quarter [inaudible]
Speaker Change: or focused on improving our merchandising assortment and securing better IP for future bundles.
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Speaker Change: And we're cautiously optimistic that the June launch of Nintendo Switch 2 will represent a nice tailwind for the video game ad market.
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Speaker Change: Adjusted EBITDA for gaming entertainment to client in the quarter, based on revenue mix and expense timing which we believe will reverse itself in Q2.
Speaker Change: Health and wellness grew revenues over 7% and adjusted EBITDA grew by over 12%.
Speaker Change: Prior to last year, the health and wellness business was one of our most consistent growers.
Speaker Change: We view last year as an aberration, and this quarter's growth, as well as a healthy pharma ad upfront as indications of a promising return to high single digit growth for the segment.
Speaker Change: It's also worth noting that the subscription business is now 15% of the segment's revenues, which has been a diversification priority for all of our digital media businesses.
Speaker Change: Conactivity's revenues grew by 5% with the core part of the business, subscription and licensing growing by 7%.
Speaker Change: In particular, we saw strong growth from both speed test and down detector.
Speaker Change: And with the market adoption and deployment of Wi-Fi 7 in 2025, we believe we will experience increased demand for Echahel.
Speaker Change: Tanactivity has historically been our fastest growing segment and we're pleased to see it poised for a re-exceleration in growth in 2025.
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Speaker Change: The margins of this business are industry leading and continued to impress at over 50% and we believe this will once again be a rule of 60 plus data services and software business.
Speaker Change: Finally, as I mentioned, the one segment that did decline in the quarter was Cybersecurity and Mark Tech, which fell nearly 11% in revenues partly due to the timing of certain revenues recognized in the prior year's first quarter.
Speaker Change: Given some of the sequential revenue trends and a small acquisition in early Q2, we still expect to see this segment grow in the second half of the year.
Speaker Change: We're particularly encouraged by progress in our VPN business where we believe we've stabilized our revenue and we're now on a trajectory to grow organically.
Speaker Change: Our advertising markets, tech and shopping, health and wellness, gaming and entertainment. We're strong in Q1 and hold promise for the year.
Speaker Change: Obviously there's a meaningful amount of uncertainty in the world right now, but we remain cautiously optimistic.
Speaker Change: Our subscription and licensing businesses are stable and growing nicely in some parts.
Speaker Change: As we always do, we're tightly managing our operating costs and capital expenses.
Speaker Change: On Capital Allocation, we continue to seek opportunities to further accelerate our EPS growth to share repurchases and acquisitions.
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Speaker Change: On the former, we have bought 4.25 million shares of our stock over the last 4 quarters, representing roughly 10% of our total shares outstanding.
In 2021, the company generated $485 million of adjusted EBITDA.
and the stock at a high of almost $130. $1.
Speaker Change: While the market processes this, we will continue to lean into this dislocation.
Speaker Change: At the same time, this environment is producing compelling acquisition opportunities for us.
Speaker Change: and we are working to ensure that we are positioned to transact.
Speaker Change: Last year we acquired four businesses and so for this year we've acquired three, have a contract signed on the fourth and have an active pipeline of opportunities across all five of our segments.
Speaker Change: Looking ahead, our focus remains on identifying the most compelling assets within our verticals.
Speaker Change: situations in which we believe we can uniquely generate value, leveraging our platform's technology teams and know how.
Speaker Change: In our multiple end markets of consumers, small and medium businesses and enterprises.
and of course, in our multiple digital categories.
Speaker Change: It's why we seek to pursue businesses with powerful and established brands that have the proven capacity to adapt.
Speaker Change: We believe we own the top-tier brands in many of our categories, brands that have endured for decades.
Speaker Change: Moreover, we expect to see the compounding effects of serial acquisition and share buybacks restore value in the company and for our shareholders.
Speaker Change: Our decision to file a lawsuit against open AI stems from a fundamental conviction to protect the core principles underpinning quality journalism and the significant investments required to produce it.
Speaker Change: This ecosystem must ensure the long-term sustainability of value for all stakeholders including the consumers who rely on credible information, the publishers who invest in its creation and the advertisers who support its dissemination.
Speaker Change: We are resourced and positioned to challenge the unauthorized use of our content by companies like OpenAI.
Speaker Change: We believe that this lawsuit is a crucial step towards fostering a digital environment where intellectual property rights are respected and the contributions of journalists and publishers are fairly recognized and compensated.
Speaker Change: We encourage everyone to read our complaint. It's full of compelling and important insights.
With that, I'll hand the call back to Bret.
Thank you, Vivek. Let's discuss our financial results.
Brett Richter: Our earnings release reflects both our gap and adjusted financial results for Q1 2025.
Brett Richter: My commentary will primarily relate to our Q1 2025 adjusted financial results and their comparisons to the relevant prior period.
Brett Richter: Please see slide 4 for the summary of our financial results.
Q1 2025 revenues were $328.6 million
Brett Richter: This reflects revenue growth of 4.5% as compared with revenues of $314.5 million for Q1 2024.
Brett Richter: Q1 2025 adjusted diluted EPS was negatively impacted as compared with the prior year period by higher net interest expense and higher depreciation and amortization each primarily related to our 2024 capital allocation activities.
Brett Richter: Slide 5 reflects performance summaries for our two primary sources of revenue, advertising and performance marketing and subscription and licensing.
Brett Richter: Other revenues declined by approximately $2 million in Q1 2025, as compared with the prior year period, primarily reflecting the decline in humble gains publishing revenues.
Brett Richter: Slide 6 through 10 reflect the Q1 financial results of each of our reportable segments which Vivek discussed in some detail already.
Speaker Change: Please refer to slide 11 as we discuss our balance sheet.
Speaker Change: As at the end of Q1 2025, we had $431 million of cash and cash equivalents and $167 million of long-term investments.
Speaker Change: We also have significant leverage capacity on both a gross and net leverage basis.
Speaker Change: As at the end of the first quarter, Gross Leverage was 1.8 times trailing 12 months adjusted EBITDA and our net leverage was 0.9 times and 0.6 times including the value of our financial investments.
Speaker Change: During the first quarter of 2025, we deployed more than $39 million of cash.
Speaker Change: for acquisitions and nearly $35 million related to share repurchases, including the repurchase of 750,000 shares during Q1 2025 under a 10B51 plant.
Speaker Change: As we had planned for, Q1 marked an active quarter for our M&A activity. We closed the acquisition of the skim and max roll, in March and our activity has continued during the first half of the second quarter. We anticipate remaining active in M&A during the balance of 2025.
Speaker Change: We are also acutely aware of the reduction in our stock price and we continue to believe that our shares are undervalued in the market as compared with the intrinsic value of our underlying businesses.
Speaker Change: Ziff Davis has long exercise discipline, capital allocation and drive returns. This includes acting decisively in the M&A market and repurchasing our shares in the open market when buying opportunities arise.
Speaker Change: To continue driving value for shareholders, we intend to use our existing share repurchase authorization to accelerate our share repurchase activity in the second quarter, while maintaining our robust balance sheet.
Speaker Change: Turning to slide 13. We are reaffirming the fiscal year 2025 guidance range that we presented in February 2025.
Speaker Change: As I noted earlier, our consolidated Q1 results largely met or exceeded our expectations.
Speaker Change: and to date we have not experienced any notable negative impact of the expected volatility and instability of the macroeconomic environment.
Speaker Change: And while we, like most companies, are exposed to recessionary risks and other macroeconomic disruptions, year to date we have not experienced any measurable negative impacts of the evolving tariff landscape.
Speaker Change: We started 2025 strong and while strong start to a fiscal year is often an indication of the potential for strong performance for the balance of 2025 given the uncertainties of the macroeconomic environment we have simply maintained our guidance.
Speaker Change: We currently expect growth to improve in Q2 2025 as compared to Q1 2025.
Speaker Change: and Q2 Adjusted Ebithom margins are expected to be similar to, if not slightly below the prior
Speaker Change: Reflecting our plan to continue to invest in our businesses to support the balance of their 2025 goals, as well as certain other factors including the acquisition of certain businesses, which initially reflect the loot of margins prior to the completion of their integration
Speaker Change: And as we have noted on prior calls, we plan to continue to focus on the creation of long term shareholder value and not run the business to achieve short-term quarterly results.
Speaker Change: Following our business outlook slides or our supplemental materials, including reconciliation statements with the various non-GAAP measures to the nearest gap equivalents.
Slide 20 includes a reconciliation of free cashflow. [inaudible]
Speaker Change: Q1 2025 reflects a use of free cash flow of approximately $5 million.
This result was largely anticipated and primarily reflects four factors.
Speaker Change: A full quarter of our TDS business, which is a significant user of working capital in the first quarter and particularly January a period that was not reflected in our Q1 2024 results.
Speaker Change: Overall, Q1 2025 reflects an $84 million cash outflow from operations from TDS for the quarter.
Speaker Change: Q1 2025 also reflects severance expenses related to a voluntary buyout program that we initiated in Q4 2024 is a way to facilitate some productive turnover.
Speaker Change: As we said at the time, we believe this reporting structure will allow investors to gain deeper insight into each of our reportable segments and give our stakeholders a deeper appreciation of the diversity of our revenue composition, the scale of our businesses and the strength of their margins.
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Speaker Change: We trust that this additional disclosure will facilitate a greater appreciation of the intrinsic value of each of our reportable segments and the discount that our current stock trading level implies when compared with a sum of the parts analysis.
Speaker Change: In addition to supporting our businesses during the early part of 2025, we have been focused on capital allocation Our M&A program has been active year to date and we plan to continue to take advantage of the opportunity to acquire stock at these levels [inaudible]
Speaker Change: With that, I would now ask the operator to rejoin us to instruct you on how to queue for questions.
Speaker Change: Thank you. We will now be conducting a question and answer session. In the interest of time, we ask that you please limit yourself to one question. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue.
Speaker Change: You may press star two if you would like to remove yourself from the queue. For participants using speak or equipment it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: And the first question today is coming from Shyam Patil, from Sascahana, Shyam, Your Line of Life.
Speaker Change: Okay, good morning. This is Aaron Samuels on for Shyam. Thank you so much for taking our question.
Speaker Change: Maybe first I just wanted to ask for an update on the overall ad market. Sounds like things are good in one two and quarter to date trends have been good to but can you just go a little bit deeper in terms of what you've seen so far quarter to date and then
Speaker Change: Could you share some thoughts on how things could trend in the rest of the year?
Speaker Change: Yeah, good morning, Aaron. Thanks for the question. So as you point out, look, Q1 was very strong for the ad business crew, a little over 12%.
Speaker Change: CNET did contribute to that ad growth, but certainly our other consumer tech businesses.
Speaker Change: Prof. Very Well, IGN Everyday Health, All Contributed Growth, Roughly, I think, 7% at Gaming and Entertainment and Health and Wellness. So, across all of our key verticals, and I always encourage those who study the company to understand the advertising business in the context of the verticals and categories in which we operate. So, the three, tech and shopping, gaming and entertainment and health and wellness looked reasonably strong.
Speaker Change: We did have some offsets, but they were planned, and that's largely in the B2B business, whereas I described in my prepare remarks.
Speaker Change: You know, we're focused on margin expansion so we're walking away from revenues that were unprofitable and so we see profitability now in that business and that was a really smart decision for us.
Speaker Change: We think that the trends, you know, for the rest of the year continue to be positive. I mentioned in the gaming side potential tailwinds relating to Nintendo Switch 2 with health and wellness, which is the vertical where we probably have
Speaker Change: The best visibility because there is an upfront that takes place with respect to pharmaceutical advertising. The upfronts have been good for us.
So look, I think that, you know, sort of this...
Speaker Change: The kind of ad growth that we are looking at should sustain. Now look, at the end of the day, if we enter into a recession, I think that would obviously change, not just our perspective, but I think everyone's perspectives, but we don't see any indications of that at this moment.
Speaker Change: Great. And if I could just ask a second question, Vivek, in the prepared remarks, you talked about the opportunity for connectivity to re-accelerate. What would you say are the top one or two priorities that the team is working on to?
He improved the growth right there [inaudible]
Speaker Change: It's entirely in the Wi-Fi part of the business. So the ethical part of the business really indexes to wireless access point sales and so the WAP market last year was pretty bad. Now, I think our view in 2025 with Wi-Fi 7 but more broadly the demand for better
Speaker Change: Wireless networks across enterprises, manufacturing centers, hospitals, universities will continue to be long term very strong so it's been a near term.
is the CEO.
Great. Thank you very much .
Speaker Change: Thank you, the next question is coming from Rishi Jaluria, from RBC Capital Markets, Rishi Alinas Life.
Rishi Jaluria: Oh, wonderful. Thanks so much for taking my questions. Nice to see the disclosures that's really helpful for us and just getting more visibility into the business. Vivek, I wanted to, and maybe for Bret as well, I wanted to dive a little bit deeper into kind of assessing some of the potential macro impacts.
Speaker Change: I think about some of your advertisers and the products they're offering, and so while you may not directly be impacted in the case that tariffs come through and things kind of go back to normal.
Speaker Change: The Recipical Terrorist Months and 90 Days are Up. I want to better understand how are we thinking about the impact of that on your customer base? What does that do in terms of advertising demand in terms of pipeline, even in terms of traffic right for some of your properties? Maybe some goes understand the puts and takes and understand that this will take a while to play out, it's very uncertain, but just any color you could provide as they would be helpful. Thank you.
Vivek Shah: Yeah, no, it's a great question, Rishi, and we obviously spend a lot of time trying to assess.
Vivek Shah: What this could mean, and then obviously dynamics change fairly frequently in this area, so just with respect to...
Vivek Shah: Direct impact of tyros is very low right so it doesn't impact [inaudible]
Vivek Shah: R-Cross, it doesn't impact our business in any meaningful direct way.
In the current dialogue, we feel fairly well insulated.
Vivek Shah: I think on gaming and entertainment similarly, yes, there's been some talk about, you know, production expenses, etc. But the gaming and entertainment space isn't one of the, you know, it's not physical goods.
Vivek Shah: It's not physical in nature and so I think you know, digital product.
Vivek Shah: I think generally is reasonably well insulated. And so then it really comes down to tech and shopping. And again, I think some of the there been exemptions on certain consumer electronics products. So if that would have continued, I think that would be beneficial. But certainly I think if you start to see. Yeah.
Significant Pressure
Vivek Shah: on the large tech marketers. Yes, they're always going to look for ways to manage their PNLs. But again, we don't see any indication of that. We see a lot of great momentum within the verticals and then the final thing I'll say is with shopping. [inaudible]
Vivek Shah: is the degree because you have to consumer element of this and I was trying to think through what that impact may be. One potential benefit actually is the degree to which consumer products go up in price. The tendency for consumers to seek discounts cash back.
Vivek Shah
Alright, very helpful. Thank you.
Thank you.
Speaker Change: Thank you. The next question will be from Ross Sandler from Barclays. Ross, your line is live.
Ross Sandler: Vivek, you mentioned the upfront for farm would be in pretty strong, could you talk broadly about how the pipeline looks for the rest of the year and how the other categories went during the upfront.
Ross Sandler: The lawsuit with OpenAI, so can you just talk about what led us down this path versus licensing? Thank you.
Yeah, so just on on the first question, um,
You know, so the upfront is actually...
Ross Sandler: Upfront Commitments for the full year. So it gives us a visibility at this point this year versus last year. How much money has been booked and committed now these are commitments right they can always be unbooked but it was pretty it was pretty strong so we're excited for that. Both by the way because I think this is something that I talked about last year we had some challenges on the direct to provider. The director consumer side has been very strong for quite a bit but we had one large pharma. And. [inaudible]
Ross Sandler: I'm going to rotate out of marketing against physicians, providers, you know, script writers.
Ross Sandler: That is now one, we're lapping it, but two, that's that's that's reversing itself. So we're optimistic [inaudible]
Ross Sandler: and so it's always instructive right because you know with you and again this is now things that you can kind of.
Ross Sandler: Park, when you start to look at the segment information that we're disclosing, but the everyday health, the consumer business is the second largest, it's right behind tech and shopping in terms of our ad franchise, so it's important.
Ross Sandler: We don't have, in the other categories, if you were asking, we don't have as much visibility, the contracts are kind of booked quarter to quarter so we can't give you that more of a down the line look.
Ross Sandler: with respect to your second question relating to our suit. Look, we've made clear...
You know that our content is highly valuable.
Ross Sandler: and that we're going to defend our intellectual property. We did attempt in good faith to address and resolve.
Ross Sandler: Open AIs on authorized use of our content, both in its training activities.
Ross Sandler: and in its rag activities, we didn't get to acceptable terms, and so look, legal action was something that was always available to us. I do encourage everyone to read the suit. I think there's a lot that you'll get from it and you'll see from it. It is a copyright infringement suit in chief, but we've got some trademark claims in the DMCA claim, and so look, there's a lot here.
Ross Sandler: It's important that we defend our content. We are owners of intellectual property. We are resourced to do this frankly. And so we think this is an opportunity to basically capture monetization and payments that are owed to us. Look, I mean, if
Ross Sandler: Frankly, if someone's going to steal, we're not just going to sit by and do nothing.
Thank you.
Thank you.
Ross Sandler: Thank you. The next question is coming from Cory Carpenter from J.P. Morgan. Cory, your line is live.
Corey Carpenter: Good morning, things to the question. I had two. Vivek, you've given some pretty helpful color and stats on just that.
Corey Carpenter: Could you just give us an update on what you're seeing there? And then secondly, on the advertising side, we heard from some companies a shift from direct sales to programmatic in recent weeks or months. Could you just remind us of your direct sales programmatic exposure and if you're seeing anything similar? Thank you.
Corey Carpenter: Yeah, great question. So with respect to just Gen AI, it's probably worth repeating what we discussed last quarter. So roughly 35% of our revenues depend on traffic.
Corey Carpenter: So right there, I think this is important because I think that is very different than maybe other similarly situated companies or companies within our industry. So 65% of our revenues are not traffic-based or traffic-dependent.
Corey Carpenter: Within traffic, about 40% of it comes from search, right? So you multiply those two, you get to a very different percentage.
Corey Carpenter: Now, we're talking about really AI overviews, and so AI overviews is another percentage. That percentage has gone from roughly 12% to a little over 20% of the top queries that generate our traffic now generate an AI overview. So I think if you multiply all this is like a 3% case.
Corey Carpenter: and so sometimes I think maybe the attention on AIOs is not commensurate to kind of its importance, you know, within our business and I'll also point out that it's not clear.
Corey Carpenter: If AIOs are positive, negative is zero sum, right? So that's another thing when it comes to clicks. Like, we're not sure on that. It's hard for anyone to divine and, you know, you've heard things from Google that might suggest they're positive. [inaudible]
Corey Carpenter: One thing that we have been tracking and now are able to track is how often we're sighted.
Corey Carpenter: In AIOs that appear on the queries that matter to us, and it's about a third of the time. So about a third of the time we're getting cited and presumably citations in AIOs is a good thing, right, because that it comes with links.
Speaker Change: Look, I think that, you know, something to watch, I think maybe the emphasis is not proportional to kind of, it's important within the context of the business.
Speaker Change: Inside of our company in terms of the percentage of revenue that that programmatic represents overall, you're probably 3% of the company's revenue. So it's not it's not it's not a big number and that's really at a design because we've organized our business to be.
Combination of highly endemic must buy direct.
Vivek Shah: Programs, because we're number one attack number one in gaming number one in health when you want to go endemic you'd come to US I think if you are broad based more general proposition I think youre selling horizontal and that does lend itself to programmatic, but we're dealing with programs that are pretty pretty involved often.
Vivek Shah: Custom programs for our clients and then on the other piece, we have a fair amount of performance marketing, which is which is not a CPM based business, which programmatic is it's more CPA cost per acquisition CPL or cost per lead CPC cost per click so we're not.
Vivek Shah: Not really.
Vivek Shah: Programmatic player in the way that maybe you'll see in some other entity.
Vivek Shah: Thank you very much.
Speaker Change: Thank you.
Vivek Shah: Thank you.
Speaker Change: And the next question will be from Yigal <unk> from Citi.
Vivek Shah: <unk> life.
Speaker Change: Hey, good morning, guys.
Speaker Change: Well, that's about capital allocation.
Speaker Change: You made a few more tuck in deals this quarter.
Speaker Change: Just what are you seeing in the M&A market right now given the volatility and then.
Speaker Change: With with where the share prices.
Speaker Change: How you guys feel about the valuation of shares how do you think about buybacks.
Speaker Change: Little bit more in <unk> than <unk>.
Speaker Change: And maybe include within all of this.
Speaker Change: Desire or ability to lever up to be more aggressive on buybacks and keep the M&A opportunity open.
Speaker Change: And then just a follow up.
Speaker Change: On the open AI suite and I'm not sure how much you can comment on this or that but.
Speaker Change: Open I also want to the White house three months ago, and they are trying to put shipment administration. This AI action plan to kind of.
Speaker Change: Unburden, some legal rules and regulations around.
Speaker Change: Copyright.
Speaker Change: For better development of AI.
Speaker Change: Any thoughts on that was that part of.
Speaker Change: Your consideration.
Speaker Change: To go down this route.
Speaker Change: To get any thoughts you have on that if you do have any thanks.
Speaker Change: Thanks, Carl let me, Brett and I'll take the first part of that question I think first and foremost our capital allocation program continues to be very active and I think you saw that shift in 2024. When we were active on all products, both M&A, where we deployed $225 million or so of capital.
Speaker Change: <unk>.
Speaker Change: Significantly accelerated our share buyback program and as we've highlighted we bought.
Speaker Change: Four to.
Speaker Change: Two 5 million shares in the last four quarters shrinking our capped by almost 10% and as we enter 2025, it's continued.
Speaker Change: Talked about the number of deals that we've already consummated <unk> side, and we can never predict the future, but based on what we're seeing we do have an anticipation that that will continue and balancing that with continuing to buy back stock, which we both mentioned in our in our prepared remarks M&A the overall M&A environment.
Speaker Change: I would say is favorable to us in the following respect one.
Speaker Change: We have five divisions that are all active and looking at deals and I think importantly, if you look back over the last handful of quarters, we've seen participation in M&A from certain of our divisions that have been sidelined for a couple of years, our cyber martech businesses participate in our gaming and entertainment businesses participated last.
Speaker Change: The absolute dollars will more dedicated towards check in shopping we've also consummated over more extended period of time, a number of transactions, which have diversified us away.
Advertising revenue into subscription revenue lose it falls into that category GDS falls into that category and even in our advertising business as we found ways to.
Speaker Change: Identify businesses that generate interest from there.
Speaker Change: <unk> is in a different way like the skin, which essentially email business. So I think theres opportunity in front of US we also see opportunity to.
Speaker Change: Find a home for companies that may be struggling in the current environment and when we do that sometimes we absorb a P&L that is not quite at the margin that we.
Speaker Change: We expect it to be and it takes us several quarters to bring that up to our expected performance I think a couple of the deals we've done in the last 12 plus months fall into that category. So overall really active and I think we intend to continue to be active with regards to using leverage we're thoughtful about that we have a $350 million.
Speaker Change: Or which other than a letter of credit reduced completely undrawn.
Speaker Change: Taking your widening the lens, despite we temper our optimism as we've talked about based on our recent performance and our expectations for the year about what's happening in the macro.
Speaker Change: That factors into our thinking though by using leverage as well.
Speaker Change: Yes, the only thing I might add before I address the open AI question is look the valuations in digital media.
Speaker Change: Our attractive right and so and the.
Speaker Change: Fears that frankly.
Speaker Change: <unk> represent a weight on our stock are also affecting.
Speaker Change: Affecting the valuations of others and digital media. So we're inclined to lean into the fears as they were set they relate to us and that expresses itself in buybacks and as it relates to potential acquisition targets within the industry. So look if if.
Speaker Change: If theyre going to be fears and we're going to see things at significant discounts, we're going to be buyers.
Speaker Change: On all fronts and we have been.
Speaker Change: With respect to.
Speaker Change: No.
Speaker Change: Just the question around open AI look I think what is heartening.
Speaker Change: Our recent developments.
Speaker Change: You know that that are in some other cases.
Speaker Change: The Thomson Reuters Thomson Reuters one on fair use at the advanced stage summary judgment in the same court wherein alright, the district of Delaware, The New York Times in a couple of other plaintiffs defeated a motion to dismiss brought by open AI. So some of these some of these.
Speaker Change: <unk>.
Speaker Change: Developments are or give us some confidence I'll look litigation is uncertain.
Speaker Change: But our cost benefit analysis basically suggested that litigation is a prudent course for us to take this will take a while to play out right. So.
Speaker Change: Not sitting here, saying, it's this is going to get addressed overnight, but it needs to get addressed that needs to be finality in the end we need to know.
Speaker Change: What the law and the interpretation of the law is.
Speaker Change: Thank you very helpful.
Speaker Change: Thank you.
Speaker Change: Thank you and the next question is coming from Robert <unk> from Evercore, Robert Your line is live.
Speaker Change: Great. Thanks for taking the question going back to the tech and shopping trends.
Speaker Change: They seem quite robust.
Speaker Change: But just wondering since we don't yet have the quarterly detail from the from prior quarters was there a particular inflection in performance or anything you could maybe tell us about the organic trend.
Speaker Change: And then when you look at the trends within that business in the quarter and maybe quarter to date as well just wondering if you could talk about the sustainability of that or a perspective, you have there whether you're seeing any pull forward from the consumer or advertisers ahead of tariffs and just any additional commentary there and then a follow up on the aio realize it's quite small.
Speaker Change: But is there any way for you to determine at this point, whether there is a conversion benefit is the traffic that comes from an aio page more qualified or productive in any measurable way. Thanks.
Speaker Change: Yes.
Speaker Change: I'll take that second question first and then just to go back to Tech and shopping we don't know right. It's a very good point, which is does an AI oh click.
Speaker Change: A more refined click and does that fact that it's more refined have more value. It's very hard a lot of the tracking is just not there. This is actually work that our Mas business is working on its interesting because the market demand to better understand.
Speaker Change: So the rate of aio present, the rate of inclusion in aio the performance out of Aio, that's actually a data need that can't be addressed through Google search console and so now looking for third party answers and so in many ways, we're getting a lot of customer interest at Mas.
Speaker Change: Because we're in the SCO analytics business, there to better understand than we internally.
Speaker Change: Leverage Mas and Stat, which is which is an enterprise solution within Mas.
Speaker Change: In our company too by the way. So we're lucky that we have some real experts on staff that because we happen to own the business.
Speaker Change: Look I think on the shopping side, there's a lot of things going on here clearly that the benefit from CNET being in the quarter this quarter versus last year, but PC Mag.
Speaker Change: 10% organic growth in that set.
Speaker Change: Property. So that has done very well retail me not has been essentially slightly up that kind of a flat proposition and then we have offsets remember we have the planned decline significant actually in <unk> I mean that revenue probably fell by a third but again there was no EBITDA was negative EBITDA in Q1 of last year in it.
Speaker Change: As positive EBITDA in Q1 of this year, so lots of puts and takes there, but what I would say is generally positive and it really is the consumer tax plus.
Speaker Change: Retail me not and again, we know what the revenue drag will be from B to b, but it is a EBITDA contributor and so thats, where sometimes maybe the revenue growth.
Speaker Change: While very robust would've been in fact more robust if you excluded.
Speaker Change: <unk> be in that equation.
The only thing I might add.
Speaker Change: They are.
Speaker Change: Only thing I might add there.
Vivek Shah: We did receive some requests for that historical information, which we will disclose when you see the quarterly information on our quarterly segment basis, you may see some various up downs that don't present themselves as clear trends in those regions for that all the reasons that vivek mentioned the different components that have different impacts over time, including the decline in certain businesses.
Vivek Shah: Which we've talked about for extended period of times, where the incremental additions in M&A, but also tying back to some of the other conversation. We had earlier on this call is we're not really a.
Vivek Shah: Price times quantity business, where we're just monetizing traffic in the marketplace into key trends based on the macro or others. We are very much first party very much campaign driven those campaigns often.
Vivek Shah: Rise and fall in quarters based on product releases and far more product releases gaming. So you will when you see these historical quarter see some up downs they won't necessarily.
Vivek Shah: Present as trends.
Vivek Shah: Got it thank you.
Vivek Shah: Thank you.
Vivek Shah: Thank you.
Speaker Change: There are no other questions in the queue at this time I would now like to hand, the call back to Bret Richter for any closing remarks.
Speaker Change: Well. Thank you Paul Thank you everyone for participating in the call and your continued interest we look forward to continuing to connect with each of you.
Speaker Change: Later, this quarter and our upcoming conferences.
Speaker Change: We hope to see some you at these events.
Speaker Change: You again and have a great day.
Speaker Change: Thank you. This does conclude today's conference you may disconnect. Your lines at this time and have a wonderful day. Thank you for your participation.