Ziff Davis: A High-Margin Media-Tech Play with AI-Driven Growth and Strategic Acquisitions

In a digital landscape increasingly defined by artificial intelligence and strategic consolidation, Ziff Davis (ZD) emerges as a compelling case study of a multi-segment media-tech company leveraging innovation and disciplined capital allocation to unlock value. With Q2 2025 results underscoring robust revenue growth, a diversified business model, and a clear roadmap for AI integration, Ziff Davis is positioning itself as an undervalued yet high-conviction opportunity for long-term investors.

Q2 2025: A Snapshot of Resilience and Growth

Ziff Davis's Q2 2025 financial results highlight its ability to navigate a competitive market while driving performance across key segments. Total revenue rose 9.8% year-over-year to $352.2 million, marking the strongest quarterly growth since 2021. This was fueled by standout performances in the Health & Wellness segment (+15.7% to $99.5 million) and Connectivity (+14.2% to $57.4 million), while the Technology & Shopping segment grew 11.3% to $80.8 million.

Profitability metrics further reinforced the company's operational strength. Adjusted EBITDA increased 11.8% to $107.7 million, and free cash flow reached $26.9 million, reflecting disciplined cost management. While net income dipped slightly to $26.3 million, this was offset by a 5.1% rise in adjusted net income per diluted share to $1.24. The company reaffirmed its full-year guidance, projecting $1.442–$1.502 billion in revenue and $505–$542 million in Adjusted EBITDA, underscoring confidence in its growth trajectory.

AI Integration: The Engine of Future-Proofing

Ziff Davis's strategic investment in AI is not just a buzzword—it's a transformative force across its platforms. The Viper Integrated Email Security (IES) service, for instance, uses natural language processing and machine learning to combat phishing threats, a critical offering in an era of escalating cyberattacks. Meanwhile, the RetailMeNot AI chatbot resolved 50% of customer inquiries autonomously, slashing operational costs and improving user satisfaction.

In the Health & Wellness segment, the Lose It app introduced AI-powered voice and photo meal logging, enabling users to track food intake 3.5x faster and achieve 6% more weight loss on average. These innovations are not just incremental—they're redefining user engagement and monetization potential.

Strategic Acquisitions: Building a Diversified Ecosystem

Ziff Davis's 2025 acquisition strategy has been equally impactful. The company completed five tuck-in deals across its Cybersecurity & Martech and Health & Wellness segments, including the acquisition of the Well + Good brand to bolster its health content library. These acquisitions have not only expanded Ziff Davis's product offerings but also accelerated integration into existing platforms like the SCIM platform, enhancing cross-selling opportunities.

The Cybersecurity & Martech segment, which saw a 0.9% revenue decline in Q2, is expected to rebound in Q3 2025, driven by these acquisitions and product enhancements. This inorganic growth strategy, combined with organic momentum, positions Ziff Davis to capitalize on high-margin verticals while mitigating sector-specific risks.

Valuation Metrics: A Discount to Intrinsic Value

Despite its strong performance, Ziff Davis trades at a significant discount to its intrinsic value. As of August 7, 2025, the stock had a P/E ratio of 17.64 and an EV/EBITDA ratio of 4.27, far below the Interactive Media & Services industry median of 12.0. This valuation gap is even more striking when compared to peers like Angi Inc. (ANGI) and Bumble Inc. (BMBL), which trade at higher multiples despite weaker growth profiles.

The company's P/S ratio of 1.21 also reflects a conservative valuation, especially given its 9.8% year-over-year revenue growth and 30.6% adjusted EBITDA margin. With $457 million in cash and a robust stock repurchase program (spending $33.9 million in Q2 alone), Ziff Davis is actively returning value to shareholders while maintaining flexibility for further strategic moves.

The Investment Thesis: A Multi-Bagger in the Making

Ziff Davis's combination of AI-driven innovation, disciplined capital allocation, and strategic acquisitions creates a compelling long-term investment case. The company's focus on high-margin verticals—such as cybersecurity, health tech, and connectivity—aligns with macro trends like digital transformation and wellness demand. Meanwhile, its undervalued stock price offers a margin of safety for investors willing to bet on its execution.

For those seeking exposure to a media-tech play with both organic and inorganic growth catalysts, Ziff Davis represents a rare opportunity. The stock's recent 18.72% post-earnings surge suggests growing recognition of its potential, but the valuation still leaves room for appreciation as AI integration and acquisition synergies materialize.

Conclusion: A Buy for the Patient Investor

Ziff Davis is not a flashy name in the tech sector, but its fundamentals tell a story of resilience, innovation, and value creation. With a strong balance sheet, a diversified business model, and a clear roadmap for leveraging AI and M&A, the company is well-positioned to outperform in a transforming digital landscape. For investors with a 3–5 year horizon, Ziff Davis offers a compelling blend of risk mitigation and upside potential—a rare combination in today's market.