Ziff Davis, Inc. (ZD): BCG Matrix [Dec-2025 Updated]

You're looking for a clear-eyed view of Ziff Davis, Inc.'s (ZD) portfolio, and the BCG Matrix is defintely the right tool to map where capital should flow in 2025. Honestly, the picture is mixed: the Health & Wellness 'Star' is shining bright with 18% adjusted EBITDA growth, while the Connectivity 'Cash Cow' is printing cash, delivering $108.2 million in Q3 Free Cash Flow. But, you've got real pressure in the 'Dogs' quadrant, where Tech & Shopping saw a 12% adjusted EBITDA drop, and the 'Question Mark' in Cybersecurity is showing volatility, swinging from a 10.8% Q1 decline to just 2% growth by Q3. Let's break down exactly where Ziff Davis needs to invest, hold, or divest right now.

Background of Ziff Davis, Inc. (ZD)

You're looking at Ziff Davis, Inc. (NASDAQ: ZD) as of late 2025, and honestly, it's a company that's been busy reshaping itself. Ziff Davis is fundamentally a vertically focused digital media and internet company. That means they own a portfolio of brands that target specific niches across the web, rather than trying to be everything to everyone. It's a multi-billion dollar operation, home to over 40+ leading brands, serving millions of customers globally.

The core of Ziff Davis, Inc.'s business spans several key areas. You'll find leading brands in technology, shopping, gaming and entertainment, health and wellness, connectivity, cybersecurity, and martech. This breadth means their revenue streams are quite diverse, though recent reports highlight specific areas gaining traction. For instance, looking back at the second quarter of 2025, the Health & Wellness segment was the largest revenue contributor, and both the Connectivity and Health & Wellness businesses were showing breakthrough results.

Financially, the company has been showing signs of stabilization and growth momentum leading into the end of the year. For the third quarter ended September 30, 2025, Ziff Davis, Inc. reported quarterly revenues of $363.7 million, which was a 2.9% increase year-over-year from $353.6 million in Q3 2024. CEO Vivek Shah noted this marked their fifth consecutive quarter of revenue growth and generated strong free cash flow. The operational results were quite strong, with income from operations jumping 197.0% to $28.4 million in Q3 2025, a significant swing from the loss of $(29.3) million in Q3 2024. Free cash flow for the quarter hit $108.2 million.

Still, the market reaction to the latest earnings was mixed; they reported a statutory loss of $0.09 per share, which fell short of what analysts were expecting for a profit. On the strategic front, Ziff Davis, Inc. has been actively managing its portfolio. They completed two acquisitions in Q3 2025-Semantic Labs in Cybersecurity & Martech and Etrality in Connectivity-adding to a history where they've deployed over $3 billion in capital on M&A. More significantly, following inbound interest, the company has engaged outside advisors to evaluate value-creating opportunities, including the potential sale of entire divisions. That's a major strategic pivot you'll want to track, especially given the recent focus on maximizing shareholder value. Finance: draft 13-week cash view by Friday.

Ziff Davis, Inc. (ZD) - BCG Matrix: Stars

The Health & Wellness segment is positioned as a Star within the Ziff Davis, Inc. (ZD) portfolio, characterized by its high growth rate and leadership in a rapidly expanding market. This segment delivered 13% year-over-year revenue growth in Q3 2025, alongside 18% adjusted EBITDA growth for the same period.

This strong showing makes Health & Wellness a primary driver of Ziff Davis, Inc.'s overall top-line expansion. For context on its scale, the segment generated $102.3 million in revenue in Q3 2025, representing the highest year-over-year growth rate among the company's five reportable segments. To maintain this leadership, significant investment is necessary, which is supported by the company's strong cash generation.

High-growth digital media assets within this unit, including brands like Everyday Health and What To Expect, are actively integrating new technology. Specifically, management highlighted the rollout of a new AI audience platform named Halo, alongside strong subscription growth from the Lose It! app. Across Ziff Davis, Inc., there is a broader investment in AI-powered platforms designed to enhance advertiser targeting and overall operational efficiency, with an AI-based data management platform being adopted across verticals.

The need for continued investment is a hallmark of a Star; while the segment generates substantial income, it consumes cash to defend and grow its market share in the competitive digital health sector. The company's ability to fund this is evident in its cash position. Ziff Davis, Inc. reported free cash flow of $108.2 million for Q3 2025, marking a 35% increase year-over-year, which helps fund these growth initiatives and ongoing share repurchases.

Here's a quick look at the segment's Q3 2025 financial contribution:

Sustaining this performance is key, as the strategy dictates that if market share leadership is maintained until the high-growth digital health market matures, this unit is expected to transition into a Cash Cow. The current focus involves:

• Maintaining market share leadership in the rapidly expanding digital health sector.
• Continuing investment in AI platforms like Halo for audience monetization.
• Supporting strong subscription growth, such as with the Lose It! service.
• Deploying capital to defend against emerging competition.

The segment's strong Q3 2025 performance, with 12.7% revenue growth, confirms its status as the largest contributor to revenue growth for Ziff Davis, Inc.

Ziff Davis, Inc. (ZD) - BCG Matrix: Cash Cows

The Cash Cow quadrant represents business units that command a high market share in a mature, slow-growth market. For Ziff Davis, Inc., this positioning is exemplified by segments that consistently generate more cash than is required for maintenance and modest investment.

The Connectivity segment, which includes Ookla/Speedtest, is characterized by its strong historical profitability, with EBITDA margins that have been known to be above 50%. While Q3 2025 saw margins compressed due to upfront product investments for anticipated growth, the segment's underlying strength remains a core Cash Cow trait.

This segment's ability to generate substantial cash flow is evident in the third quarter results. Free Cash Flow (FCF) for Q3 2025 reached $108.2 million, marking a significant year-over-year increase of 35% over Q3 2024's $80.1 million. The overall company adjusted EBITDA margin for the quarter was 34.1%.

A key indicator of a Cash Cow is the revenue stream that requires minimal promotional spending to maintain. Subscription and Licensing revenue, a stable component of the business model, grew a consistent 2% year-over-year in Q3 2025. This steady, high-margin revenue stream feeds the corporate engine.

The capital generated by these strong performers is actively deployed to enhance shareholder returns, a classic Cash Cow strategy of 'milking' gains. Through the end of Q3 2025, Ziff Davis, Inc. deployed approximately $109 million toward share repurchases, which accounted for nearly 85% of the year-to-date FCF. Specifically in Q3 2025, $44.4 million was deployed for share repurchases. Year-to-date through Q3 2025, 3.6 million shares were repurchased.

Here's a look at the key financial metrics supporting the Cash Cow thesis for Ziff Davis, Inc. as of Q3 2025:

The deployment of capital is focused on maintaining shareholder value while funding necessary infrastructure improvements, such as product development in Connectivity, which saw launches like Speedtest Certified in September and Speedtest Pulse in November.

• Connectivity revenue grew 2% in Q3 2025.
• Connectivity margins were impacted by investments in product development and cloud services.
• The company repurchased nearly 3.3 million shares in Q3 2025, reducing weighted average shares by 7.5% versus the prior period.
• Net cash provided by operating activities was $138.3 million in Q3 2025.

The strategy centers on supporting these high-share businesses to maintain their cash generation capability, which is critical for the entire Ziff Davis, Inc. portfolio.

Ziff Davis, Inc. (ZD) - BCG Matrix: Dogs

Dogs, in the Boston Consulting Group (BCG) Matrix, are units or products with a low market share and low growth rates. They frequently break even, neither earning nor consuming much cash. Dogs are generally considered cash traps because businesses have money tied up in them, even though they bring back almost nothing in return. These business units are prime candidates for divestiture.

For Ziff Davis, Inc., the pressure points suggesting a Dog classification are clearly visible in the Q3 2025 results for two of its segments. Expensive turn-around plans usually don\'t help these situations, so you have to look hard at the underlying economics of the business units involved. Honestly, these areas require careful scrutiny regarding resource allocation.

The performance metrics for the segments fitting this profile show clear contraction, even as the overall company posted total Q3 2025 revenues of $363.7 million and total adjusted EBITDA of $124.1 million. The two segments under review are Tech & Shopping and Gaming & Entertainment.

The Tech & Shopping segment, which includes RetailMeNot and PCMag, saw its revenue drop by 2% and adjusted EBITDA decline by 12% in Q3 2025. This decline was primarily driven by the continued wind-down of game publishing activities. To be fair, excluding the impact of game publishing, one report suggests the segment actually grew revenue and EBITDA, but the overall reported figures place it firmly in the low-growth, low-share quadrant for now.

The Gaming & Entertainment segment, home to IGN and Humble Bundle, also faced headwinds, with revenues decreasing by about 4% year-over-year in Q3 2025. While its adjusted EBITDA managed a slight increase of nearly 3%, the top-line pressure is a concern, especially given the external market dynamics affecting web traffic.

These segments are not operating in a vacuum; they face significant external market challenges that depress growth potential and market share capture. You can see the impact of these forces in the following areas:

• Facing search volatility impacting web traffic.
• Competitive pressure from AI overviews.
• Reliance on third-party platforms for traffic.
• The wind-down of game publishing activities.

Dogs are units where you should avoid and minimize investment. The strategy here is typically divestiture or harvesting cash flow while minimizing new capital deployment. If onboarding takes 14+ days, churn risk rises, and for these segments, the market volatility suggests that expensive turn-around plans are unlikely to yield the necessary returns to justify the effort.

Finance: draft 13-week cash view by Friday.

Ziff Davis, Inc. (ZD) - BCG Matrix: Question Marks

You're looking at the business units that are running hard in high-potential markets but haven't yet secured a dominant position. For Ziff Davis, Inc., the Cybersecurity & Martech segment fits this profile, demanding cash to fight for share in a growing space.

The segment's performance shows the volatility inherent in a Question Mark. For the third quarter of 2025, Cybersecurity & Martech returned to growth, posting a 2% revenue increase year-over-year. This followed a period of instability, evidenced by a revenue decline of (0.9)% in the second quarter of 2025. This unit is clearly in a high-growth market, but its low market share means returns are not yet commensurate with the effort.

To capture market share in the high-growth cybersecurity sector, Ziff Davis, Inc. is actively deploying capital through its acquisition program. The company completed the acquisition of Semantic Labs in Q3 2025 to bolster this segment. Year-to-date through Q3 2025, Ziff Davis, Inc. deployed approximately $67.3 million for current and prior year acquisitions across the business, showing the cash consumption required for this strategy. Overall, since 2013 through September 2025, the company has deployed $3.3 billion on M&A.

The uncertainty around the long-term fit or required investment level is underscored by management's strategic review. Ziff Davis, Inc. announced it engaged outside advisors to evaluate value-creating opportunities, including the possible sale of entire divisions of the Company. This indicates a serious evaluation of whether to invest heavily to turn these units into Stars or to divest them.

Here's a look at the recent financial context for this segment:

The path forward for the Cybersecurity & Martech Question Mark requires decisive action, either through aggressive investment or divestiture. The company is clearly using its M&A engine to try and force market share gains.

• Segment revenue growth was 2% in Q3 2025.
• The unit recorded $71.4 million in revenue for Q3 2025.
• Acquired Semantic Labs in Q3 2025.
• Management is evaluating the potential sale of entire divisions.
• Year-to-date M&A spend reached $67.3 million by the end of Q3 2025.

To be fair, the segment is showing positive momentum in Q3 2025, but it needs to accelerate quickly to avoid becoming a Dog. Finance: draft scenario analysis on required investment for 50% market share gain in Cybersecurity by 2028 by Friday.