Ziff Davis’s HCP Advertising Challenges vs. Optimism and Shifting AI Licensing Stance in 2026 Earnings Call

Date of Call: Aug 7, 2026

Financials Results

• Revenue: $286.7 million, down 2.7% YOY
• EPS: $1.03 per diluted share, up 13.2% YOY
• Operating Margin: Adjusted EBITDA margin of 26.8%, down less than half a percentage point YOY

Guidance:

• Q3 2026 revenues expected to increase sequentially but decline low to mid single digits YOY.
• Q3 adjusted EBITDA margin expected to show modest improvement vs Q2.
• Q4 2026 expected to show improvement vs Q3, with lower rate of revenue decline and adjusted EBITDA margins slightly down YOY.
• Adjusted diluted EPS expected to reflect benefit of YOY share reduction from buybacks.
• Non-GAAP tax rate expected to remain 24% to 25% range annually, excluding connectivity sale tax payments.

Business Commentary:

Connectivity Business Sale and Share Repurchase:

• Ziff Davis completed the sale of its connectivity business to Accenture for $1.2 billion.
• This transaction reflects a 14.5 times multiple of the connectivity business's trailing 12 months of adjusted EBITDA less capex.
• The sale was part of the company's strategy to address the gap between its share price and the value of its businesses, with a portion of the proceeds used for tax obligations and share repurchases.

Revenue and EBITDA Trends Across Segments:

• The company's consolidated revenue across four reportable segments declined 2.7% year-over-year, with modest growth in gaming and entertainment, and cybersecurity and more tech, offset by declines in tech and shopping, and health and wellness.
• Adjusted EBITDA declined 3.7% year-over-year, while adjusted EPS grew 13% due to share count reduction from buyback activities.
• The decline in revenue was attributed to lower revenues in certain segments, such as tech and shopping, while growth in others like gaming and entertainment was driven by record quarters at Humble Bundle.

Tech and Shopping Segment Performance:

• Tech and Shopping's second quarter revenues declined 5% year-over-year, showing improvement from previous quarters' declines.
• Adjusted EBITDA for this segment rose more than 8%.
• The segment's performance was impacted by headwinds in traditional search traffic, but progress was made in growing audiences through off-platform channels like social media and CTV.

Gaming and Entertainment Revenue Growth:

• Gaming and entertainment revenues grew by almost 1% year-over-year, driven by a record quarter at Humble Bundle.
• The growth was offset by declines in ad revenue at IGN, attributed to the current state of the video game market and the slate of titles.
• IGN's game help tools and events, such as IGN Live, contributed to the segment's performance.

Health and Wellness Segment Challenges:

• Health and wellness revenues were down nearly 5%, with adjusted EBITDA down nearly 10% year-over-year.
• The decline was primarily due to lower HCP advertising revenue at MedPage today, as some large pharma clients reduced their spend levels.
• Despite these challenges, the segment expects sequential growth, driven by strength in consumer DTC advertising revenues and the growth of GLP-1 prescriptions.

Sentiment Analysis:

Overall Tone: Positive

• Management expressed being 'very pleased with the market's response' to value unlock efforts, citing stock up ~45% YTD. They noted 'strong cash position,' 'delivered on our promise to unlock additional shareholder value,' and are 'excited' about future catalysts like GTA 6 launch and faster feature rollout from AI code authorship.

Q&A:

• Question from Robert Culbreth (Evercore): Could you talk about the HCP advertising demand environment and efforts to leverage AI to broaden service area? Also, on gaming, any expectations for back-half slate catalysts?
  Response: MedPage HCP advertising grew sequentially in Q1 and expects sequential improvement to continue through 2026, though facing structural pressure from pharma clients shifting to lower-cost/AI platforms. The company is expanding distribution (e.g., EHR integration). For gaming, blockbuster releases like GTA 6 (slated for Nov 2026) are expected to help IGN recovery, and the Humble Bundle platform is seeing strong growth with enhanced content and faster feature rollout from AI engineering.

• Question from Rishi Jaluria (RBC): What is the potential M&A pipeline and strategic thinking around acquisitions? Also, within cybersecurity and MarTech, any longer-term data monetization opportunities?
  Response: The company remains a disciplined, patient buyer with a focus on small-to-mid-market acquisitions (typically $5-$50M EBITDA) that add trusted brands and compete with its own stock. On cyber/Martech, IPVanish is highlighted as a returned-to-growth business. In MarTech, there are interesting data assets in email and SEO spaces for potential monetization, but no data collection in cybersecurity (VPN).

• Question from Ron Josie (Citi): Regarding tech and shopping headwinds from traditional search traffic, what are the plans to shore up/grow the business? Also, progress on off-platform channels like social?
  Response: The company is seeing industry-wide declines in search referral traffic and increasing AIOs in Google search (now ~50% of queries). Offsets are coming from growth in social platforms, email, video (CTV, YouTube), and non-traffic businesses. There is also strong performance in AI visibility (e.g., IGN cited as a top source by SEMrush), which is attracting marketer interest in aligning with trusted brands.

• Question from Susquehanna (on for Sean): Thoughts on Bending Spoons and AI content licensing opportunities?
  Response: Bending Spoons is viewed as a useful data point with a similar acquisition model, but not a direct competitor. The company believes its owned brands carry more value than its current multiple and is focused on being an aggressive buyer of its own stock. On AI licensing, they are not inclined to sign RAG-focused agreements that compromise fair compensation for foundational training, preferring to wait for legal clarity and a rational licensing market.

Contradiction Point 1

HCP Advertising Strategy and Outlook

The tone shifts from acknowledging significant challenges to expressing more optimism.

Robert Culbreth (Evercore) - Robert Culbreth (Evercore)

2026Q2: Sequential improvement in Q1 and expected to continue through 2026. - Vivek Shah(CEO)

Could you discuss the demand environment for HCP advertising, efforts to leverage AI to broaden the service area, and expectations for potential catalysts in the gaming/entertainment sector in the back half of the year? - Robert Coolbrith (Evercore)

2026Q2: MedPage Today's HCP advertising faced challenges as large pharma clients reduced spend and shifted to lower-cost, often AI-based, platforms. - Vivek Shah(CEO)

Contradiction Point 2

Status of AI Content Licensing Strategy

The stance appears to evolve from a firm legal position to a more patient, precedent-waiting approach.

Daniil (Susquehanna) on behalf of Sean - Daniil (Susquehanna) on behalf of Sean

2026Q2: The company is not inclined to sign RAG-focused agreements that compromise fair compensation for foundational training data. The stance is to be patient rather than accept quick cash. - Vivek Shah(CEO)

What is your view on Bending Spoons as a digital asset acquirer, and what is the strategy for AI content licensing, including the most attractive assets? - Daniil (Susquehanna) on behalf of Shyam Patil

2026Q2: Ziff Davis is not inclined to sign RAG-focused licensing agreements that compromise fair compensation for foundational training data. The company prefers to wait for greater legal clarity... valuing long-term financial rationality over quick cash. - Vivek Shah(CEO)

Contradiction Point 3

MedPage Today's Demand Environment

Contradiction on the severity and nature of challenges in HCP advertising.

Robert Culbreth (Evercore) - Robert Culbreth (Evercore)

2026Q2: Sequential improvement in Q1 and expected to continue through 2026. Structural challenge due to large pharma clients shifting to lower-cost (often AI-based) platforms. - Vivek Shah(CEO)

Could you discuss the demand environment for HCP advertising and efforts to leverage AI to broaden service area, as well as expectations for potential catalysts in gaming/entertainment related to the game slate in the back half? - Robert Coolbrith (Evercore)

2026Q1: MedPage had a tough Q1 due to timing and specific advertiser booking delays. Improvement is expected in Q2 and for the rest of the year. - Vivek Shah(CEO)

Contradiction Point 4

AI Content Licensing Strategy

Contradiction on the company's stance regarding licensing AI training data.

Daniil (Susquehanna) on behalf of Sean - Daniil (Susquehanna) on behalf of Sean

2026Q2: The company is not inclined to sign RAG-focused agreements that compromise fair compensation for foundational training data. It prefers to establish the right financial precedent... The stance is to be patient rather than accept quick cash. - Vivek Shah(CEO)

What is your strategy for AI content licensing through Bending Spoons, and which digital assets are most attractive? - Ross Sandler (Barclays)

2026Q1: The positive impact of AI is not new... The company is fostering an AI-forward mindset, hiring AI-native talent, and seeing healthy internal competition to replicate successes. - Vivek Shah(CEO)

Contradiction Point 5

Tech & Shopping Segment Outlook and Offset Timing

Contradiction on when recovery for Tech & Shopping will materialize.

Ron Josie (Citi) - Ron Josie (Citi)

2026Q2: Declines in search referral traffic are industry-wide... This has led to increased interest from marketers... - Vivek Shah(CEO)

What are the alternatives and plans to grow Tech & Shopping amid traditional search traffic headwinds, and how are off-platform channels like social progressing to offset these declines? - Rishi Jaluria (RBC Capital Markets)

2025Q4: Offsets for the Tech & Shopping decline are expected to start materializing in the second half of 2026... - Vivek Shah(CEO)