FULL YEAR AND FOURTH QUARTER 2021 PRELIMINARY UNAUDITED SUPPLEMENTAL MATERIALS

FEBRUARY 14, 2022

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Q4 and FY 2021 Reconciliation of GAAP to Adjusted non-GAAP Earnings & EPS

Figures in Thousands

Three Months Ended December 31,

Twelve Months Ended December 31

2020

2021

2020

2021

Cost of revenues

$

46,159

$

45,718

$

178,403

$

188,053

Plus:

(77)

(86)

(332)

(306)

Share based compensation (1)

Acquisition related integration costs (2)

(57)

(96)

(227)

(382)

Amortization (4)

(143)

(251)

(1,694)

(1,548)

Adjusted non-GAAP cost of revenues

$

45,882

$

45,285

$

176,150

$

185,817

Sales and marketing

$

114,610

$

138,100

$

366,359

$

493,049

Plus:

(218)

(409)

(1,011)

(1,288)

Share based compensation (1)

Acquisition related integration costs (2)

(1,117)

(178)

(1,803)

(1,824)

Lease asset impairments and other charges (9)

(76)

-

(76)

-

Leasehold improvement impairments (10)

(3)

-

(3)

-

Adjusted non-GAAP sales and marketing

$

113,196

$

137,513

$

363,466

$

489,937

Research, development and engineering

$

19,038

$

21,875

$

57,148

$

78,874

Plus:

Share based compensation (1)

(364)

(593)

(1,396)

(1,984)

Acquisition related integration costs (2)

(627)

(357)

(606)

(1,457)

Lease asset impairments and other charges (9)

(35)

-

(35)

-

Adjusted non-GAAP research, development and engineering

$

18,012

$

20,925

$

55,111

$

75,433

General and administrative

$

126,398

$

117,541

$

420,295

$

457,691

Plus:

Share based compensation (1)

(4,629)

(5,039)

(19,781)

(20,551)

Acquisition related integration costs (2)

(7,990)

(2,903)

(10,752)

(7,469)

Amortization (4)

(46,875)

(45,053)

(156,377)

(185,855)

Tax (benefit) expense from prior years (6)

-

(1,500)

-

-

Sale of assets (7)

-

-

-

(1,500)

Lease asset impairments and other charges (9)

(2,610)

(3,134)

(14,830)

-

Leasehold improvement impairments (10)

(23)

-

(3,628)

(12,988)

Disposal related costs (10)

(1)

(135)

(1)

(607)

Adjusted non-GAAP general and administrative

$

64,270

$

59,777

$

214,926

$

228,721

Goodwill impairment on business

$

-

$

-

$

-

$

(32,630)

Plus:

$

-

$

-

Goodwill impairment on business (12)

$

-

-

$

-

$

32,630

Adjusted non-GAAP goodwill impairment on business

$

-

$

-

$

-

$

-

Interest expense, net

$

(20,836)

$

(16,810)

$

(56,188)

$

(79,031)

Plus:

6,292

1,979

24,384

18,482

Interest costs (3)

Tax expense from prior years (6)

-

-

-

-

Adjusted non-GAAP interest expense, net

$

(14,544)

$

(14,831)

$

(31,804)

$

(60,549)

Loss on debt extinguishment

$

-

$

(4,527)

$

-

$

(4,527)

Plus:

Interest costs (3)

-

7,323

-

7,323

Adjusted non-GAAP loss on debt extinguishment

$

-

$

2,796

$

-

$

2,796

(Loss) gain on sale of businesses

$

-

$

-

$

17,122

$

(21,798)

Plus:

Sale of assets (7)

$

-

-

$

(16,654)

$

22,088

Adjusted non-GAAP gain on sale of businesses

$

-

$

-

$

468

$

290

Loss on investments, net

$

-

$

-

$

(20,991)

$

(16,677)

Plus:

-

-

20,826

16,677

Investments (5)

Sale of assets (7)

-

-

-

-

Adjusted non-GAAP loss on investments, net

$

-

$

-

$

(165)

$

-

Unrealized gain on short-term investment

$

-

$

290,073

$

-

$

290,073

Plus:

-

(289,512)

-

(289,512)

Investments (5)

Adjusted non-GAAP loss on investments, net

$

-

$

561

$

-

$

561

Other (income) expense, net

$

4,034

$

1,759

$

65

$

1,293

Plus:

(208)

-

(209)

-

Acquistion related integration costs (2)

Sale of assets (7)

-

290

(386)

-

Intra-entity transfers (8)

(2,121)

-

(619)

-

Lease asset impairments and other charges (9)

(385)

-

(5,385)

-

Adjusted non-GAAP other (income) expense, net

$

1,320

$

2,049

$

(6,534)

$

1,293

Income tax (benefit) expense

$

18,781

$

5,156

$

37,929

$

(15,944)

Plus:

1,055

1,825

2,954

8,619

Share based compensation (1)

Acquisition related integration costs (2)

1,857

1,610

2,649

4,460

Interest costs (3)

1,527

2,993

5,887

7,036

Amortization (4)

8,633

16,723

33,824

60,145

Investments (5)

(1,174)

478

(1,174)

5,567

Tax (benefit) expense from prior years (6)

(533)

-

(5,448)

-

Sale of assets (7)

(650)

1,798

(7,678)

7,192

Intra-entity transfers (8)

(265)

-

(673)

-

Lease asset impairments and other charges (9)

363

792

3,164

-

Leasehold improvement impairments (10)

-

-

791

3,195

Disposal related costs (10)

(36)

-

-

200

Goodwill impairment on business (12)

-

33

-

8,028

Adjusted non-GAAP income tax provision

$

29,558

$

31,408

$

72,225

$

88,498

Income (loss) from equity method investment, net

$

(539)

$

19,249

$

(11,338)

$

35,845

Plus:

539

(19,249)

11,338

(35,845)

Investments (5)

Adjusted non-GAAP income (loss) from equity method investment, net

$

-

$

-

$

-

$

-

Total adjustments

$

(58,185)

$

265,687

$

(211,551)

$

94,840

GAAP earnings per diluted share

$0.91

$7.62

$0.58

$8.09

Adjustments *

$1.33

($5.45)

$4.55

($1.76)

Adjusted non-GAAP earnings per diluted share

$2.24

$2.17

$5.13

$6.33

Non-GAAP net income is GAAP net income with the following modifications: (1) elimination of share-based compensation; (2) elimination of certain acquisition related integration costs; (3) elimination of interest costs in excess of the coupon rate associated with the convertible notes and overlapping interest of senior notes prior to extinguishment; (4) elimination of amortization of patents and intangible assets that we acquired; (5) elimination of change in value on investment; (6) elimination of additional tax expense/benefit from prior years; (7) elimination of gain on sale of assets; (8) elimination of intra-entity transfers; (9) elimination of lease asset impairments and other charges; (10) elimination of leasehold improvement impairments and disposal related costs; and (11) elimination of goodwill impairment on business

2

GAAP Reconciliation - Free Cash Flow (1)(2)

$MM

Ziff Davis

Net cash provided by operating activities from continuing and discontinued operations

Less:

Three Months Ended December 31st,

20202021

$

124,070

$

85,319

Twelve Months Ended December 31st,

20202021

$

480,079

$

515,571

Purchase of property and equipment Add:

Contingent consideration

Free cash flow from continuing and discontinued operations (2)

(21,286)

(26,245)

(92,552)

(113,740)

99

-

20,202

685

$

102,883

$

59,074

$

407,729

$

402,516

1. Free Cash Flow is defined as net cash provided by operating activities, less purchases of property, plant and equipment, plus contingent consideration. Free Cash Flow amounts are not meant as a substitute for GAAP, but are solely for informational purposes.

2. Figures are adjusted non-GAAP; includes Consensus and the divested assets

3

GAAP Reconciliation - Adjusted EBITDA (1)(2)

  1. Adjusted EBITDA is defined as net income plus interest and other expense, net; income tax expense; depreciation and amortization and the items used to reconcile GAAP to Adjusted Non-GAAP EPS. Adjusted EBITDA amounts are not meant as a substitute for GAAP, but are solely for informational purposes
  2. Figures are adjusted non-GAAP; includes Consensus and the divested assets

4

Q4 2021 Reconciliation of GAAP to Adjusted EBITDA (1)

NOTE 1: Table above excludes certain intercompany allocations

1. Figures are adjusted non-GAAP

5

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Ziff Davis Inc. published this content on 15 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 February 2022 01:16:06 UTC.